SHAREHOLDERS of Tanjong plc were pleasantly surprised last week when the diversified power and gaming company announced a generous dividend of 28 sen less tax per share. The good news came after Tanjong reported a splendid full-year financial results where net profit rose by 100 per cent to RM323.1 million.
Analysts say the gross final dividend of 28 sen per share was an improvement over 22 sen declared in the same period a year ago. Many believe Tanjong may announce higher dividends in coming years.
The dividend announcement, together with a 10 sen tax-exempt dividend paid earlier, has increased Tanjong's full year dividend payout to 38 sen, exceeding the previous year's payout of 30 sen. The 28 sen gross dividend per share will go ex on July 2, and be paid to shareholders on July 22.
Kim Eng Securities, in its commentary report, said: With strong cash flows from the gaming and power generation businesses and minimal capital spending going forward, Tanjongs board has recognised the need to pay progressively higher dividend.''
Tanjong revealed an impressive performance recently for the full year ended January 2003. Pre-tax profit rose significantly to RM521.4 million from RM311.6 million while sales improved to RM2.45 billion from RM2.1 billion. Earnings per share jumped to 83.78 sen from 42.42 sen.
The power business saw earnings improve by 48 per cent while the gaming division's earnings rose by 23 per cent.
Analysts expect Tanjong's power generation business to remain its key profit contributor in the coming years, while earnings from gaming may register moderate growth, if not flat. However, many believe that the higher contributions from power are more than sufficient to offset lower gaming contributions.
Tanjong's attractive dividends, sound fundamentals and undemanding valuations have made it a favourite among analysts.
The company has also earned investors' respect for its good corporate governance and management competency.
Controlled by tycoon Ananda Krishnan, Tanjong's principal activities include numbers forecast and racing totalisator businesses, power generation, and property investment. The company is also involved in the import, bottling, sale and distribution of liquefied petroleum gas in China.
Apart from that, Tanjong also has a joint venture in a film exhibition business and an associate that leases facilities for online lottery operation - by P.W. Thong
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