UT shareholders approve share buy back scheme

Accra, April 21, GNA - Shareholders of UT Financial Services on Tuesday approved a resolution that will enable the company to purchase its own shares in order to protect the value and shield investors from losses.

The share buy back scheme will enable the company to purchase and hold 15 percent of the total issued shares of 210.7 million at any point in time.

While some shareholders held that the Board should impose a ceiling and intervene only when the prices fell below the ceiling others believed that market forces should be allowed to determine prices. Explaining the reasons for the scheme at the first Annual General Meeting of the company, Mr Prince Kofi Amoabeng, Chief Executive Officer said the aim was to protect long-term investors from speculative activities of short-term investors, who in the face of the global financial crisis were fleeing the market. He said most of those short-term investors were disposing off their stocks at steep discounts regardless of the strong fundamentals of the company to the detriment of continuing long-term shareholders. Mr Amoabeng said the purchase of the company shares would seek to absorb the shares put on sale by speculative investors from price volatility and that would be done with the view of delivering the highest value to shareholders. In the review of the company's performance last year, Mr Amoabeng said profits grew two-fold despite the ongoing global and financial crisis.

Profit before tax increased by 28 percent to GHc7.5 million from GHc5.9 million while total assets grew by 68 percent to GHC 127.8 million. Total loans disbursed stood at GHc114 million compared to GHc100 million. At the same time the company's net worth rose by 52 percent to GHc16.8 million, including three million Ghana cedis raised from the Initial Public Offer.

Mr Amoabeng said the company would step up its operations to deliver sustained long-term growth and consistent performance. The Chief Executive Officer was positive about the contribution of the formation of UT holdings, which own UT affiliate companies to the success of UT Financial Services.

Topmost among UT affiliate companies are UT Bank, UT Logistics, UT Properties and UT International. "Looking into the future, the existence of the group would put our company ahead of the competition and support our anticipated growth into other geographical areas and ensure operational dexterity and versatility." "This configuration is certainly going to ensure the expansion and efficiency of the business of UT Financial Services Limited as the activities of other companies in the group would compliment business and generate obvious synergies," Mr Amoabeng added. A dividend of GHp1.01 per share was declared and approved by shareholders.