Show­ing its met­tle

But did it have to pay an in­terim div­i­dend?

Finweek English Edition - - Companies&markets -

THE SHARE PRICE of AltX met­als trader In­simbi has held steady de­spite a rather spec­tac­u­lar – but largely ex­pected – fall in in­terim prof­its. Pre­sum­ably, the mar­ket likes the fact In­simbi still man­aged to gen­er­ate around R19m in op­er­at­ing cash flow for the rather tough six months pe­riod. How­ever, af­ter ac­count­ing for div­i­dends, tax and in­ter­est its net cash out­flow for the pe­riod was around R8m. And then an­other R7,5m was spent on new as­sets.

All in all, In­simbi saw its cash bal­ances halved from R34m at the beginning of its new fi­nan­cial year to around R17m as at end-Au­gust.

Dur­ing the in­terim pe­riod ma­jor In­simbi op­er­a­tions – such as its steel, its non-fer­rous busi­ness and the com­pany foundry – felt pres­sure at both top line and op­er­at­ing level. The pres­sure isn’t sur­pris­ing con­sid­er­ing re­ces­sion­ary con­di­tions through­out most of In­simbi’s mar­kets. Direc­tors warned tough trad­ing con­di­tions were ex­pected to per­sist into the sec­ond half of its fi­nan­cial year and al­luded to “def­i­nite” signs of a sus­tain­able and grad­ual re­cov­ery in mar­kets.

If trad­ing con­di­tions re­main iffy, why then did In­simbi de­clare a div­i­dend of 2c/ share – a de­ci­sion that will see an­other R5,2m flow­ing out of its cof­fers. Fin­week has pre­vi­ously raised the is­sue of the determination of smaller cap com­pa­nies to de­clare a div­i­dend no mat­ter how badly op­er­a­tions have fared. In­simbi’s in­terim div­i­dend cover is a gen­er­ous 1,3 times.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.