Shareholders want dividends

Not surprising then that Johnnic's dividend policy took centre stage at the company's low key annual general meeting held at Gallagher estate.

"Should it remain the sole discretion of directors to determine when and how the company pays dividends to shareholders?" asked an anxious shareholder.

Johnnic chairperson Marcel Golding-who also chairs diversified investment group HCI which is Johnnic's controlling shareholder-explained that the company did not have the cash required to declare dividends.

"There are a lot of investment opportunities that we have identified. It makes sence for us to acquire companies that will in the long term add value to Johnnic than to declare dividends. This strategy will in the long run vindicate our decision," said Golding adding that the decision to pay out dividends will remain the discretion of the company's directors.

Another shareholder took Johnnic directors to task for opting to invest in US based landfill gas company Montauk at the expense of local investment opportunities.

"Compared to SA's stable economy, the US has become a volatile market. Given this set of circumstances, it's difficult to understand your decision to buy Montauk."

In response Golding argued that there was value proposition in the Montauk deal.

- Fin24