Page 22 - CIMA SCS Workbook August 2018 - Day 2 Tasks

CIMA AUGUST 2018 – STRATEGIC CASE STUDY

Reference Materials – email forwarded from Den Rice

Email

To: Den Rice
From: Fiona Finch
Subject: Dividend concerns

Hi Den

I met Alan at a family wedding over the weekend and I was complaining to him about the dividend
paid out recently - only B$ 3 million in total (or B$ 0.15 per share) was really disappointing! I
remember even as recently as 2013 we were getting over B$ 2.00 per share. Alan suggested I
should express my concerns to you and your finance team, to see if there’s any way you can try to
improve things next year.

Here’s hoping!

Email

To: Den Rice
From: John Small, Holsworthy Bank plc
Subject: Dividend concerns

Hello Den

Thank you for sending me a copy of the FNG annual report.

Last time we spoke, you still hadn’t decided what level of dividend was going to be paid in respect
of the last financial year. I was surprised to see in the accounts that you’d paid out B$ 3 million,
given that FNG’s bottom line profit was lower than this.

I’m a bit concerned that this dividend policy is unsustainable, and that it might impact on your
ability to pay back the Holsworthy Bank borrowings over the next couple of years.

Could we please meet up later in the week to discuss this? Perhaps on Wednesday at 11.00 at the
bank?

Kind regards

36 KAPLAN PUBLISHING