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Cape Town - Woolworths [JSE:WHL] announced on Thursday the maturity of its black economic empowerment employee share ownership scheme (Beeesos).
The scheme was launched in 2007 as part of the company’s socio-economic transformation and had an 8-year life span. A new class of participating convertible, redeemable, non-cumulative preference shares was created to be held in a special trust for the duration of the scheme. Woolworths told Fin24 on Thursday that no decisions have been taken yet on the issue of perhaps starting another such scheme.
These shares represented approximately 10% of the total ordinary share capital of Woolworths at the time. They carried voting and dividend rights.
Shares were allocated to previously disadvantaged employees on the basis of both length of service and seniority.
The Beeesos shares have now been converted into Woolworths ordinary shares, which the beneficiaries are entitled to hold or realise.
The strong performance of the business over the past eight years has created R2.4bn for the participants, who have also enjoyed dividends of R332m during the life of the scheme.
The Woolworths Employee Education Fund will also benefit from the unwinding of the scheme.
“Woolworths is extremely pleased with the success of the empowerment scheme," said Sam Ngumeni, chief operating officer: human resources and transformation, supply chain, logistics and IT at Woolworths.
"Including our employees in the financial benefits of the growth of the business was an important step and part of a range of transformation initiatives we continue to drive as part of Woolworths Good Business Journey," said Ngumeni.
On Wednesday, Woolworths announced that it expects to beat estimates of annual sales and that revenue has likely surged 55%.
It said sales were boosted by the first-time contribution from David Jones, an Australian department store chain it acquired in August last year.
Employee reaction
“I am in the fortunate position that my teenage daughter is academically strong and currently a prefect busy with her final year. She has chosen to study occupational therapy which, as we all know, comes at a cost. I will be investing my dividends and final pay-out in her studies next year,” said Dene, a store manager in the Eastern Cape.
“I have saved my funds, in part, to help me pay for my dream traditional wedding. I am so delighted to have been a part of this share scheme," said Tebogo, a store employee in Gauteng.
“My wife and I have saved every last cent for our family’s future,” said Jabu, an employee in Woolworths foods department in Cape Town.
READ: Woolworths set to beat full-year sales estimates
