Holiday Entertainment Co (好樂迪), one of the nation’s two leading karaoke chains, yesterday announced plans to reduce its capital and increase shareholder returns.
The company said it would cut its capital by 15 percent, or NT$221 million (US$7.74 million), to adjust its capital structure and boost return on equity.
Holiday’s paid-in capital would be reduced to NT$1.25 billion and shareholders would receive NT$1.5 per share if the reduction is approved at a shareholders’ meeting on June 16, the company said in a regulatory filing.
Photo: CNA
The move to reduce capital came after the company reported that it had performed poorly last year due to social distancing measures imposed by the government following a local COVID-19 outbreak in the middle of May.
Holiday reported net losses of NT$245.57 million in the first three quarters of last year, or losses per share of NT$1.67, after it suspended business for five months due to the government’s disease prevention measures.
With business recovering in the final quarter of the year, the company posted net profit of NT$63 million, or earnings per share of NT$0.43, for the whole of last year, the company said.
However, last year’s earnings were still 90 percent lower than a year earlier, Holiday said.
The company’s board of directors has approved a plan to distribute a cash dividend of NT$0.5 per share to shareholders this year. Overall, shareholders would receive NT$2 in dividends per share.
Holiday said that it still has sufficient cash flow for business operations, and plans to launch two new venues this year to boost its total number of outlets to 54 in Taiwan.
Holiday is not alone in cutting capital to boost its return on equity; another recent example is printed circuit board maker Gold Circuit Electronics Ltd (金像電子).
Gold Circuit on Monday announced that it would slash its paid-in capital by 10 percent and return NT$1 per share to its shareholders.
As the company’s board has decided to pay a cash dividend of NT$2.2 per share, shareholders would receive total dividends of NT$3.2 per share in this year, it said in a statement.
The move came as the company’s net profit grew 41.6 percent annually to NT$2.93 billion last year, a record high, or earnings per share of NT$5.41, while revenue expanded 13.7 percent to NT$26.61 billion, also the highest in the company’s history.
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