N1.4bn Loss: Ikeja Hotel Rules Out Dividend Payment

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By Goddy Egene

Ikeja Hotel Plc has it may not be able to declare dividend at the end
of financial year. In a notification to shareholders, the company said
it posted a loss after tax of N1.4billion for the nine months ended
September 30, 2020, compared with a profit after tax of N429 million
in the corresponding period of 2019.

According to the company, the loss resulted from the continued
effects of the COVID-19 pandemic on the hospitality sector, stressing
that the loss is likely to affect declaration of dividend for the Year
ended December 31, 2020.

The company also disclosed that it received a letter dated October 15,
2020 from the Lagos State Government, purportedly revoking its right
of occupancy on its land situated at Opebi Gorge, Ikeja, Lagos.

Although the company said it had taken legal action to contest this
revocation, it noted that the revocation has the potential to impair
the assets of the group to the tune of N4. 63 billion if the
government succeeds.

“Ikeja Hotel Plc is responding to these challenges in order to return
the business to profitability,” it said.

Market operators said the hope of shareholders getting dividend soon
has been dashed by this development contrary to the assurance given by
the company last July.

Having not receiving dividend for over five years, the shareholders
had tasked the new management of the company to ensure the trend was
reversed.
Speaking at the company’s 42nd annual general meeting in Lagos, the
Chairman of Ikeja Hotel Plc, Chief Anthony Idigbe, had expressed
optimism that the company was well-positioned to declare interim
dividend in the current financial year.

According to him, the new management had ensured compliance with
regulatory requirement to avoid charges resulting from penalties and
violations in its operations.

He said: “Unfortunately, the board of directors is unable to recommend
the payment of any dividend for the financial year under review. We
are however hopeful that we would be able to declare interim dividend
during the course of the year 2019. High standards of corporate
governance are fundamental to the sustainable operation of your
company. The board is committed to ensuring that each director
continues to make valuable contribution to the growth of the
business.”

“We have maintained a cordial relationship between the company and the
regulators as well as with the operator of its asset, Marriott
International, key shareholders and staff and this has enhanced
business confidence.”