INVESTOR RELATIONS SITE
OF LSI SOFTWARE
On 20 December 2016, the Management Board of LSI Software S.A. adopted the Resolution approving the dividend policy. The intention of the Management Board of LSI Software S.A. is to recommend to the General Meeting payment of dividends in conformity with the profitability and financial capacity. Each time, at the final determination of the value of the dividend, which will be recommended to the General Meeting, the Board will consider, amongst others, the following important factors:
– investment needs arising from the implementation of the Group’s strategy;
– the liquidity situation of the Group;
– the market situation;
– dividend yield and payout ratios used by comparable companies;
– the cost and the possibility of obtaining financing;
– legal requirements and the provisions of financing agreements, in particular regarding not exceeding a certain level of debt ratio and optimizing the financing structure of the Group’s business.
If the General Meeting will consider if all these factors are fulfilled, not causing any threats to liquidity situation of the company that dividends will be distributed in future.
The Management Board points out that a lack of recommendation to pay the dividend from the profit of 2016 was associated with:
– the investment needs related to the conclusion of the share purchase agreement with GiP Sp. z o.o. at the price of PLN 4.65m, whereas by 30 June 30 2017 the Issuer paid for the shares in the amount of PLN 3.50m; the remaining part of the price, i.e. PLN 1.15m, is payable within twelve months of the date of conclusion of the agreement,
– the capital needs related to incorporating and launching a new subsidiary in the US in the amount of PLN 0.74m,
– liquidity situation of LSI Software S.A. Taking into account the cash balance as of 30 June 2017 amounting to PLN 1.7 million and Issuer’s the cash flow projections taking account of the above expenses, the recommendation to pay dividend from the profit for 2016 in the opinion of the Management Board entail an excessive risk of deterioration of the liquidity situation and the necessity to increase debt level of the Company.
Management Board of LSI Software S.A. expects that future years will be a period of significant acceleration in the Group’s growth both on the domestic and foreign markets.
Process of expanding to foreign markets is slower than expected, but management board of LSI Software S.A. is taking all the necessary actions to lower percentage polish market in income concentration and trying to implement continuously new activities to get satisfactory level.
The company’s Management Board believes that acquisition of GiP gives strong basis to increase revenue growth and a lot of new possibilities to intensify activities through expansion. Purchase price of that company according to all these features in opinion of Management Board has been satisfactory. After acquisition of GiP, purchase of software licenses even went on higher level than before, it was not any drop notified. In forecasts, Management Board is not unveiling any plans according future acquisitions.