Diligent says no dividend this year, mulls US listing
By Paul McBeth
June 25 (BusinessDesk) - Diligent Board Member Services, whose strong operational performance has been undermined by a slew of administrative errors, won’t pay a dividend this year, preferring to reinvest funds back into the business, and has set up a group to review listing options.
Chairman David Liptak told shareholders at today’s annual meeting in Auckland the board has decided to “retain current and future earnings to support operations and finance future growth” and “does not intend to pay a dividend in 2013,” according to presentation slides published on the NZX.
The company has been building a growing pile of cash, adding US$3.1 million in the first three months of the year to its US$33.3 million in cash and equivalents as at Dec. 31. That increasing cash position has fuelled speculation Diligent is ripe for a takeover offer, and put pressure on the company to make a return to shareholders.
Liptak said the board will review its capital management policy at the end of the year.
Diligent is also weighing up its listing options, setting up a capital markets working group made up of Liptak and fellow directors Mark Weldon and Greg Peterson. The group will work with chief executive Alex Sodi, general counsel Tom Tartaro and chief financial officer Carl Blandino to weigh up the costs and benefits of various options.
Because the company is subject to US public company law “we expect any listing in the US would not create any material additional regulatory burden, cost or complexity,” Liptak said. “All options will be considered, including dual listing, secondary listings, and the various markets available within both the US and New Zealand.”
Liptak reaffirmed Diligent’s commitment to review its corporate governance, announced last week when it mistakenly recognised revenue early. That was the latest administrative error, which included assigning too many options to its executives and appointing auditors who didn’t comply with New Zealand regulation.
The shares fell 0.3 percent to $6.93 today, paring its 27 percent gain this year.