Special dividend boosts Briscoe shares

NICK KRAUSE
Last updated 13:58 17/05/2012
BGR 2.820 -0.03 -1.05%
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Shares in homewares and sporting goods retailer Briscoe Group leapt almost 9 per cent this morning on news the company will pay a $21.4 million special dividend to shareholders.

The share price jumped 8.97 per cent to $1.70 a share, its highest level since July 2007.

The company had been generating and retaining cash surpluses each year since it first listed on the NZX a decade ago, chairwoman Rosanne Meo told the company's annual meeting today.

After funding business operations, investments and capital expenditure, the group has distributed on average about 75 per cent of net profit to shareholders in dividends totalling $151m over the period.

''Over the last 10 years we have made large investments in store developments and technology, acquired the homewares business Living & Giving and have purchased several properties,'' Meo said. The strength of its performance had meant Briscoes was able to finance all of those from cash generated by the group.

"As market conditions improve, we anticipate that investment in our store development programme will rise to higher levels than has been the case in recent years," she said.

From the second half of this year and through next year, the company anticipated an intense programme of store fit-outs and refurbishment projects.

"After taking these anticipated cash requirements into account, we expect that the balances we hold that will not be utilised in the business in the coming year will be of the order of $25-$30m," Meo said.

"We continue to seek acquisition and expansion opportunities and this remains the most preferred potential use of surplus cash as has been indicated previously to the market and shareholders."

Cash balances had increased to an extent that a distribution of cash back to shareholders was possible without impeding the board's conservative approach to funding. It would also not impede the group's ability to take advantage of acquisition or expansion opportunities should they arise, she said.

A special dividend of 10c a share to shareholders, or $21.37m, could be made while retaining the cash balances at a level the board was comfortable with.

The dividend will be paid on June 28 for those on the share register as at 5pm on June 14. The dividend will be fully imputed.

Briscoe ceo and majority shareholder Rod Duke will reap an estimated $16,692,000 from the special shareholder dividend announced at today's annual general meeting.

Duke, a NBR Rich Lister with an estimated personal wealth of around $300 million, is the majority shareholder in the retailer with a 78.1 per cent stake.

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His stake increased during the year when he obtained another 10 million shares in March, lifting his shareholding from 75 per cent.

The only other significant shareholder is Australian retailer and Forbes Rich Lister Gerald Harvey with 2.4 per cent and Harvey Norman Properties NZ with a similar 2.4 per cent stake.

- BusinessDay.co.nz

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