Afdis seeks share option scheme approval

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AFRICAN Distillers Limited (Afdis) is seeking shareholder approval for an employee share option scheme of four million shares meant to incentivise and retain employees.

BY TATIRA ZWINOIRA

In a notice of the annual general meeting slated for November 9, company secretary Lydiah Mutamuko said the rules of the scheme have been approved by the Zimbabwe Stock Exchange (ZSE).

As such, Mutamuko added that the rules would be available for inspection at the registered offices of the company.

“The directors of the company be and are hereby authorised to implement the African Distillers Limited Share Option Scheme (2017) and allocate 4 000 000 African Distillers Limited shares to this scheme,” she said.

The four million shares mean that Afdis will be reapportioning 3,45% of their 115,77 million shares recorded as at the end of trading on Thursday.

It is expected that the employees will wait for a specified vesting period to pass before they can exercise the option and buy the stock, as the idea behind having the scheme is in efforts to support incentives between the employees and shareholders in the company.

Financial encyclopaedia, Investopedia, says companies have employee share schemes incentive or motivation for the retention of employees including managerial staff.

It also provides an advantage or benefit in respect of employment service, office or other gainful occupation.

Shareholders want to see the stock price increase, so rewarding employees as the stock price goes up over time guarantees that everyone has the same goals in mind.

As of Thursday, the year to date price change for Afdis as listed on the ZSE grew 216,67% reflecting the company has been in a healthy position.

What could be contributing to the increase in price is the company posting double digit growth in volumes of all its three product categories, with wines leading the pack at 29% at the end of their full financial year ended June 30, this year.

This contributed to the company increasing profit after tax by 146,76% to $2,76 million.

In the period under review, spirits continued to be the major revenue contributor at 66%, while ready-to-drink products contributed 24% to the total revenue of $24,89 million which was a 22% volume growth.

Afdis chairperson Pearson Gowero said what could be helping the rise in share price was the fact that management was focusing on the efficient conversion of cash resources into raw materials, exploring revenue growth opportunities and implementing cost control measures.

The strategy was paying off in helping the company stay viable and profitable, which is leaving them in a healthy
position as reflected by their share
price.

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