On July 27th 2020, the Management Board of KRUK S.A. resolved to recommend to the General Meeting that a portion of the Company’s net profit for 2019 be allocated either to buy back Company shares for cancellation at a price of PLN 350 per share or to pay out dividend of PLN 5 per share. The KRUK Group’s consolidated net profit for 2019 came in at PLN 277m, and KRUK S.A. net profit at PLN 386m, of which PLN 95m is intended for distribution among shareholders. In recommending partial distribution of the Company’s net profit for 2019, the Management Board took into account, in particular, the Company’s current financial and liquidity position, its lower investment activity during 2020, its strategic objectives, as well as the situation prevailing in Poland and globally in the wake of the COVID-19 epidemic. As a listed company since 2011, KRUK distributed an aggregate amount of PLN 288m in dividends between 2015 and 2019.
“KRUK posted a solid net profit for 2019, which we intend to share with our investors. By the way, this is what have invariably done for five years now. Of course, the COVID-19 pandemic prompted us to take a little longer before making a final decision on the Management Board’s recommendation. But near the end of the second quarter of 2020, the Group’s sound financial and liquidity position tipped the scales in favour of profit distribution,” commented Piotr Krupa, President of the Management Board of KRUK S.A. “As for the way in which funds are to be distributed, we propose to buy back shares from our shareholders for cancellation and, only as an alternative, to consider regular dividend payment. In our opinion, the price for shares we would buy back, being in effect a form of dividend, should be attractive to all the shareholders. Therefore, the proposed price of PLN 350 per share would not exclude those who invested in the KRUK stock when it was trading at historical highs. At the same time, the buyback would provide additional benefits, such as liquidity on the market, a higher net transaction amount for individual shareholders and indirect boost to the KRUK stock price,” added Piotr Krupa. “With a total buyback value recommended at PLN 95 m, 271 thousand shares would be repurchased. We expect all our shareholders to subscribe. We want to proceed to the buyback immediately after the General Meeting and to close it by November this year. We believe this proposal is the best option for both our shareholders and the KRUK Group. Of course, the shareholders themselves would decide at the General Meeting whether such buyback should be undertaken and on what terms. An alternative would be the payment of regular dividend, with the proposed distribution amount of PLN 95 m, which would give our shareholders PLN 5 per share, but the decision is entirely up to them.”
According to the Company’s earlier announcements, the General Meeting will be held by August 31st 2020, and this is the date when the final decision regarding distribution of the 2019 profit is due. Detailed terms and conditions of the buyback programme would be defined in a resolution of the Annual General Meeting, to be convened by the Management Board.