KRUK gives notice of Annual General Meeting and reveals details of proposed allocation of 2019 profit

The last day of August 2020 has been set as the date of the KRUK S.A.’s Annual General Meeting. For the first time ever, the Company’s General Meeting will be held with remote attendance. In addition to approving the financial statements for the previous year and granting liability discharge to members of the Company’s governing bodies, the owners will decide on the allocation of 2019 profit.

The Management Board is of the opinion that the Group’s financial condition and liquidity are sound enough to allow it to partially share the previous year’s profit with shareholders.  The recommended amount of PLN 95m could be distributed through a buyback of Company shares, at a price of PLN 350 per share. This means repurchase from shareholder of up to 271,000 shares for cancellation. Invitations to tender shares could be extended to all the Company’s shareholders, with a special focus on minority interests. An alternative method of profit distribution could the payment of a regular dividend of PLN 5 per share.

Four days after its adoption, the Management Board’s recommendation was endorsed by the KRUK S.A. Supervisory Board. In addition, the shareholders and investors will be able to review the Company’s most recent results for H1 2020, to be issued on August 27th 2020, ahead of the General Meeting.

 “Out of concern for our shareholders during the coronavirus pandemic, we have decided on remote attendance at the Annual General Meeting. This will be the first time ever for us. The decision to hold the General Meeting by electronic means has been prompted by safety concerns, which are my main priority,” comments Piotr Krupa, President of the Management Board of KRUK S.A. “As from today, shareholders can review the details of draft resolutions to be voted on at the Annual General Meeting, including that on the allocation of 2019 profit and the method of its distribution to owners. If shareholders give the go-ahead for the share buyback, it will be the first time for KRUK to distribute income in such form, but also the sixth consecutive occasion when it partly shares its profit with shareholders. Given the distributing nature of the share buyback, we want our shareholders to understand its terms well, counting on a 100% turnout at the General Meeting. In particular, we want to make sure that the interests of our retail investors are protected. As the Management Board, we propose that a downward rounding often applied when reducing tender offers be substituted with an upward rounding for shareholders who offer or declare for repurchase less than 70 and more than 29 shares. The thresholds of 29 and 70 shares have been set on the assumption that the buyback programme would be fully subscribed, with a mathematical rounding up to a whole share. The repurchase price per share should be higher than KRUK’s historically highest price on the stock exchange, so that the buyback remains attractive as a dividend yield opportunity even to those shareholders who invested in the KRUK stock at more than PLN 300. Of course, it is entirely up to the shareholders to decide at the General Meeting on the actual allocation of profit, its method and final terms. On our part, we would like to carry out the potential buyback immediately after the General Meeting, with a brokerage house of our choice,” added Piotr Krupa. 

In 2019, the KRUK Group’s consolidated net profit was PLN 277m, and KRUK S.A.’s separate profit came in at PLN 386m, of which PLN 95m is intended by the Management Board for distribution among shareholders. When recommending partial distribution of the Company’s net profit for 2019, the Company’s Management Board took into account, in particular, the Company’s current financial and liquidity position, lower investment activity in 2020, its strategic objectives, and the impact of the COVID-19 epidemic in Poland and globally. As a listed company since 2011, KRUK has already paid out dividends of PLN 288m between 2015 and 2019.