Some select Q&A during this year's AGM. The full Q&A can be downloaded
here.
Q:Tom Gitogo, the former CEO, left before the end of his term and you paid him 154 million KES and he just recently sold off all his shares. This is not a good picture of your business health. What are you doing to alleviate this and improve your standing at the NSE?
A:Former GCEO was on contract. The company was not doing well. The Board made some changes to this effect.
As he was selling his shares, other shareholders who believe in CIC were buying, such as the new Group Chief Executive Officer (GCEO), CPA Patrick Nyaga were buying. All the shares in the market are significantly undervalued. Given the strategies outlined by the GCEO in his speech, the company performance will grow and increase profitability thus increasing the share value at NSE.
Q: What is the dividend payment rate, how is it determined and will it be paid, and can it paid by Mpesa instead of cheque?A: Dividend is determined by the profitability and also Capital requirements for the company. Due to reduced profitability, and the need to conserve capital owing to COVID-19 pandemic, the Company will not be paying any dividends for year 2019
Q: Why is the share price declining and what are you doing to protect shareholder value?A: The market price for all the shares is undervalued due to the current COVID-19 environment which has impacted all business negatively.
As per the GCEO’s statement the company is undergoing transformational initiatives aimed at growth of the business, assets and sustainable profitability. This will ensure increased value to the shareholders.
We also hope that Covid -19 will ease with the time opening up business and vibrancy in the economy.
Q: What measures have you taken since revenues seem to be dwindling?A:•Operational efficiency
•Cost optimization
•Elimination of non-core costs
•Space optimization
•Freeze recruitment
•Among others
Q:Where do you invest investors’ money as in do u invest commercial paper? Let us not go the Amana capital way or Cytonn way.A: We do invest in commercial paper as well as a range of other financial instruments such as corporate bonds, government securities, equities and bank deposits. However, to give you comfort, please note that our investment decisions are guided by an Investment Policy which ensures that investors' money is preserved. Our investments are also managed by our subsidiary CIC Asset Management (CICAM), which undertakes fundamental analytical tests before investing the funds, and which is doing very well in the market – controlling over 40% of the unit trusts funds
Q: Why do we have Positions i.e MD LIFE AND MD GENERAL BUSINESS on acting positionsA: The previous MD’s left the organization. We are in the process of finalizing with process of recruiting substantive MDs for the two companies.
Q: In the Consolidated Statement of Financial Position, you do not separate current assets from non-current ones and also current liabilities from non-current liabilities. Please do so to enable us as investors to further interrogate performanceA:Our Financial Statements are prepared on the basis of International Financial Reporting Standards requirements. Currently, there is no requirement to separate non-current from current assets on the Statement of Financial Position. However, we present the disclosures in our financial statements on a Liquidity basis.