Carreras puffs up dividends

Sunday, February 09, 2014    

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Carreras saw a jump in profits during the last three months of 2013 or it dug deeper into its capital base to pay shareholders this quarter.

Either way, the cigarette distributor is paying out $786 million in dividends next month, following a $573 million special cash distribution the week before last.

Shareholders on record as at February 20, will receive a $1.62-a-share interim payment on March 13.

The combined payout this quarter will exceed the $1.26 billion the company distributed to shareholders during the first three months of 2013.

Over the last few years, Carreras has maintained an aggressive dividend policy, whereby it pays shareholders close to the equivalent of the net profit made in the previous quarter.

For instance, the company paid out $485.4 million in the last quarter of 2013 following a $485.8 million net profit for the September quarter, much like the dividend payment and profit in the previous quarter.

Similarly, during the three moths to June 30 last year, it paid out $1.08 billion in dividends following a $1.4 billion profit in the January to March quarter of 2013. Albeit, that dividend payment reduced the company's capital base from $3.7 billion at the end of March 2013 to $3.1 billion at the end of June, given that Carreras's profit declined during the end-June quarter.

The cigarette distributor has been experiencing a fall off in sales since a public smoking ban was implemented last July, and its profit has been squeezed for it.

What's more, the share price on the Jamaica Stock Exchange has been trending downwards since last June, when it traded at its 52-week high of $61.

Last Friday, the stock closed at $34.12 a share, up by 12 cents from the start of day's trading.





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