Atlas defers div.

Press, 19 September 1980, Page 8

Atlas defers div.

Atlas Majestic Industries, Ltd, advised the Stock Exchange Association yesterday, that its specified preference share dividend was deferred because it would be irresponsible for the directors to pay dividends until trading profits are restored or alternatively liabilities were reduced to a level satisfactory to the directors, and cash was then available for distribution to shareholders.

As advised (in the prelimi-l nary vearly report) on July: 29, factors causing present' problems included earlier over-production, which had since been aggravated by a hardening market and a deteriorating economy, the directors said. “Firm action has been taken to correct this, and steady progress is being made in reducing stocks and liabilities. This action however, takes time and creates losses as production is reduced below break-even levels.

“The annual accounts and the directors’ review are being printed, and an up-to-date report will be given to shareholders at the annual meeting on October 30,” the directors said. Yesterday’s statement amplified a one-sentence message; from the Atlas Majestic

chairman (Mr C. A. Pearson) to the association the previous evening, advising that it was the intention-of the directors to defer paying the half-yearly dividend of the 10 per cent cumulative specified preference’shares. The report read: “In view of the adverse trading result for the year, the directors did not recommend the payment for the interim dividend for the year ending March 31, 1981.”.

On July 30 Atlas Majestic reported a trading profit of $19,000 for the year, to [March 31, which became a deficit of $547,000 after unis p e c i f i e d extraordinary' j items. An ordinary .dividend iwas not recommended.

Atlas Majestic issued 1,575,000 cumulative specified preference shares of 50c each bearing 10 per cent interest, in 1976, which convert to ordinary shares, on a one-for-one basis, on March 31, 1982. Market observers could not recall any other instance where a specified preference dividend had not been paid. Specified preference shares are, however, a relatively recent form of capital raising, the Atlas Majestic issue, being one of the first.

But as the shares are cumulative preference ones, means that the deferred interim dividend will be paid at some later stage before conversions.