A Coke Dividend
Beverage, Zambian Breweries

Psssst! That’s the sound that shareholders of Zambrew (Zambian Breweries Plc.) will be hearing when they hear the news that the board of directors for their company at their meeting on 27 December 2018, passed a resolution to declare a Special Dividend of 3.68 Kwacha per share for the financial year ended 31 December 2018 to be paid from the proceeds of the disposal of the Company’s business of manufacturing, distributing, marketing and selling non-alcoholic ready-to-drink beverages.

A special dividend is a non-recurring distribution of company assets, usually in the form of cash, to shareholders.

The company was awash the cash following the conclusion of the transaction at the epilogue of 2018. According to statements attributed to the company, “Zambian Breweries will continue to manufacture and bottle Coca-Cola soft drinks under a “co-packaging” contract with Coca-Cola Beverages Zambia (CCBZ).” This is because the former parent has infrastructure that is imbedded into its ecosystem.

According to SENS Announcement published on 8th January 2019, the Special Dividend shall be payable to shareholders registered in the Company’s books as at close of business on 15th February 2019. Payment date will be on or about 18th February 2019.

Since the announcement, 500 ZAMBREW shares were traded on the LuSE Main Tier on 8th January, trading at a share price of at K7.51 per share. The total turnover on that trading day was K3,755 (USD311) of which ZAMBREW contributed 100%. The trading was certainly not inspired by the special dividend.

With the disposal of Coke finally behind the company, the management team lead by Jose Moran Ramirez will be fully focused on Better World strategy. According to their 2017 Annual Report, the Better World strategy is the Company’s route towards driving its sustainable development agenda for the business, and will in no way deviate from the earlier corporate social investments programs undertaken by the Company under SABMiller Plc. This is the company’s version of share value which they believe will now be enhanced for the betterment of our communities.

Our projection for 2019 is that with EPS 123% stronger as reported in their half year performance report, shareholders can estimate a forward EPS at end of financial year 2018 of about 0.504. The only Achilles heel we decoded at the time was the current liabilities that had almost tripled (increased by 185%) at half year. Overall we expect performance at the close of the financial year to be stronger and a new leaner chapter being started in the new year.

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