Olympia Turnaround? Part III

The Olympia Capital Holdings 2022 shareholders AGM at Nairobi club on Friday, August 26 started with a bit of confusion as the Chairman, Dr. Chris Obura, insisted that shareholders needed to wear masks unless they were speaking. It was attended by about 100 shareholders and was the first physical meeting in three years as the last two had been held virtually. The Chairman said the company had found that hosting virtual AGMs was more costly than physical ones and so the company had decided to try one, even as Covid-19 protocols remain.

The meeting took about an hour with lots of Q&A with shareholders about not having seen the documents they were being asked to approve, such as the annual report and minutes of last year’s online AGM (posted online and which the registrars had emailed) and the lack of a dividend.

Governance: The company has a unique structure with a holding company and subsidiaries and has primarily relocated its business to Botswana. The Managing Director was not at the AGM as the Chairman said that he works full-time in Botswana. This has been the case since the passing of their previous Managing Director Michael Matu in 2020.

Manufacturing Cost: During the Q&A, the Chairman mentioned that, of their Kshs 500 million in sales, 400 million is from Botswana where Olympia now does its floor tiles manufacturing, after halting that in Kenya. He said that the cost of manufacturing was one-third cheaper in Botswana than in Kenya.

Dividend when? Olympia can only pay dividends when its various subsidiaries pay dividends to the parent company – and the one in Botswana was not allowed by law to pay until it had settled a bank debt. But now that the loan was capitalized, a dividend may come to Olympia’s shareholders from profits next year.

Goodies: The Chairman said they had not expected many shareholders to show up and that the venue had only set out a small amount of tea and snacks. Nevertheless, the board agreed on Kshs 500 cash as lunch allowance and each shareholder was paid on the way out of the meeting.

Verdict: Looks like shareholders have a pent-up demand to attend physical AGMs after two years of virtual ones, that were occasioned by Covid-19.

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