ACCESS Financial Services has decided to split its stock 10 to one in a move to improve liquidity on the junior market and will put the resolution to a vote among shareholders at its annual general meeting set for April 21 at the Knutsford Court Hotel in Kingston.

Last Friday, the company announced the plan to split it shares and pay out just under $14 million in dividends, a day after release its financial results.

Access made net profit of $66 million for the year that ended December 31, 2009, up from the $33 million it reported for the previous financial year.

The profit translated to earnings of $2.88 per share, which means that the last traded price of $29.01 puts the financial institution’s price-to-earnings ratio at just over 10.

The stock split will convert 27.45 million ordinary shares into 274.5 million shares traded at one-tenth the last traded price.

Access’ managing director Marcus James said the move was being made in an effort to create liquidity in the stock and to bring the share price down from where the market generally perceives as being high.

“A lot of people look at the price and think its high,” James told the Business Observer. “It wont affect the value of the stock but it will reduce the absolute price.”

Access’ stock has performed creditably on the JSE Junior Market — the share price has moved from its listing price of $18.34 on October 30, 2009 to where it is now — a 58 per cent increase.

But the shares only crossed the floor on 19 days since being listed while large volumes are hardly traded — the most amount of shares to be traded on any given day totalled 26,300.

The resolution will likely be passed as 80 per cent of the shares are collectively held by the head of the financial institution and the next largest shareholder, Mayberry Investments.

Access is primarily a microlender and made most of its income from interest on loans — $295 million out of its total operating income of $343 million in 2009, up from $220 million out of $247 million.

Earnings from money services improved significantly over the year, from $24 million in 2008 to $38 million last year but the firm still saw considerable loan growth.

Access’ loan portfolio grew by 28 per cent to $480 million over the year, with personal loans growing by 18 per cent to $373 million and business loans up 80 per cent to $108 million.

This is why James says “business loans market provides the most opportunities”.

Access’ board of directors also approved the payment of an interim dividend in the amount of 50 cents per share on March 30 to shareholders on record on March 12.

The ex-dividend date for such payment will be the March 10.