Though some shareholders faulted the move, the Managing Director of the company Wale Osin justified the move saying it was necessary in this period and that the managers, Meristem Securities were competent to go about the share buyback in a way it would be beneficial to the company.
Share buyback is the repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who might be looking for a controlling stake.
Though no clear reasons were advanced for the move, Custodian and Allied Insurance Article of Association and Memorandum of Understanding were amended to accommodate the buyback and the company noted it would comply with Securities and Exchange Commission’s (SEC) guidelines on the matter.
Giving the operating results of the company under the year ended 31st December 2008, the chairman of the company, Chief Ade Ojo noted improvements in the company’s performances in the face of stiff competition.
He said the company’s gross premium increased to N4.103 billion from N1.715 billion last year representing 51 percent increase while investment income grew by 100 percent to N1.2554 billion from N627.4 million in 2007.
Profit before tax he said grew by 75 percent to N1.85 billion, higher than the N1.056 billion posted in 2007 while after tax grew by 70 percent to n1.559, higher than the N917 million made the previous year and total assets grew 111 percent from N5.66 billion N11.941 billion.
Based on the performance, the board gave shareholders a 17kobo dividend, 5kobo higher than the 12kobo they gave last year.
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