Nampak gets the chop

Nampak cut its dividend this week. Basically, Nampak is struggling – although you’d think everything is not so bad if you read the CEO’s comments. I have a couple of excerpts below:

“Nampak has delivered a strong set of results (note: then, why cut dividend?) … During the reporting period, markets in which Nampak operates were characterised by subdued growth and volatile currencies due to lower commodity prices, drought and tightening global financial conditions (note: code for out of our control).

Given the challenging macroeconomic conditions in the regions where we operate  (note: more code for out of our control), Nampak has taken proactive and prudent steps (note: patting ourselves on the back because we still believe we did very well, problems were not our fault) to reduce its cost base, improve its operational performance, and strengthen its balance sheet by restructuring debt, conserving cash, not declaring an interim ordinary dividend and monetising non-core property. This will increase Nampak’s resilience in the face of challenging conditions and ensure sustainable profitability going forward.

We continue our focus on operational excellence and improved asset utilisation across all of our operations. Enhancements in procurement, operations and product portfolio optimisation have delivered results to the bottom line.”

Of course, he knows his business better than me but I can’t believe some of the things CEO’s write. I just love the buzz words/phrases: “proactive”, “improve operational performance”, “monetising non-core property”, “sustainable profitability”, “operational excellence”, “asset utilisation” and my favourite, “product portfolio optimisation”.

Mr CEO, you haven’t told me anything remotely useful. I would prefer you simply wrote:

“Dear Shareholders,
It was a tough year and the business didn’t manage to grow its earnings. We can’t afford to pay you a dividend. We expect to start a dividend again in [insert date]
Kind regards
Management”

This is useful. Flowery, buzz-word filled language is not.

Ok, rant over. I don’t like it when businesses cut dividends. Moving on…

Here is this week’s table. I have removed Bidvest as I need to make some adjustments for the Bid Corp unbundling.

[Note: Google drive is down so table has been uploaded as picture]

Disclaimer: I have tried my best to ensure that the table above is accurate. It is based on factual data and does not contain any recommendations. Errors and Omissions are Excluded (E&OE).