By the end of November, the Fabrity Holding Board plans to pay 1.30 PLN per share to its shareholders as an advance on dividends from the profit of 2024. This is due, in part, to tax overpayment issues, which could push the consolidated net profit for the half-year over 6.8 million PLN. Furthermore, the merger of Fabrity Holding – a stock exchange-listed company – with its subsidiary, Fabrity, is expected to strengthen the cost-effectiveness and operational efficiency of the capital group.
After a successful first half of the year, the Fabrity Holding Group is estimated to have achieved 37.7 million PLN in service sales revenues (+20% YoY), 4.3 million PLN in EBITDA (+15% YoY), and 3.5 million PLN in operating profit (+40% YoY). The Board of Fabrity Holding has recommended to the Supervisory Board that they pay more than 2.9 million PLN (1.3 PLN per share) in advance dividends from the 2024 profits within the next three months. With the Board’s approval, a decision will be made about the specific date of payout and the date the right to receive these advance dividends from held shares is established.
As of June this year, Fabrity Holding paid out 7.4 million PLN in dividends (3.25 PLN per share), which, combined with the earlier share buyback, totaled 15.1 million PLN for shareholders. The total funds distributed to shareholders from the profits of 2021-2023 were nearly 44.4 million PLN, with dividends alone accounting for 36.7 million PLN, or a payout of 15.65 PLN per share. Consequently, investors who bought shares a little over two years ago have already recouped their investment in gross dividends alone.
There are plans to merge Fabrity, the main operating company, with the holding company, Fabrity Holding. The merging plan and exchange rate for Fabrity shares into those of Fabrity Holding have been agreed upon based on the valuations of the companies provided by an independent third party. The ratio is 69.51:1, meaning in the process of merging, Fabrity shareholders other than Fabrity Holding will receive approximately 69.51 Fabrity Holding shares for each Fabrity share held. Therefore, they will receive a total of 514,374 Fabrity Holding shares for the 7.4k Fabrity shares they hold, constituting 18.50% of the increased share capital. The planned merger will be accomplished by transferring all of Fabrity’s assets to Fabrity Holding in exchange for shares, which Fabrity Holding will issue to other Fabrity partners (merger through acquisition). The Fabrity company will be dissolved without liquidation, and the unit listed on the Warsaw Stock Exchange will shorten its name, leaving only the first part.
Artur Piątek, Vice President of the Board of Fabrity Holding, explains that “After the sale of the marketing companies, the question arose about the further structure of the Fabrity Group. The merger of the Fabrity Holding PLC with the leading subsidiary in the Group, Fabrity LLC, is the next natural step and will also be the last stage of a multi-year process of simplifying the structure. As of 2018, the Group consisted of nine entities, and the scale of simplification will also be indicated by the change in the name of the stock exchange company. We are giving up the word ‘holding’ in the name and the stock exchange company will use the name ‘Fabrity PLC.’ We also have expectations connected to the simplification of internal processes, the reduction in the number of operations between companies in the Group, and the resulting reduction in administrative costs. We should start to feel these benefits in the first half of 2025. We hope that the formal merger of the companies through registration in the KRS (National Court Register) will take place in the first quarter of next year.”
Tomasz Burczyński, President of the Board of Fabrity Holding, points out that “Apart from the obvious benefits related to the simplification of the structure and processes connected with support services, this step is being taken primarily with a focus on strategy implementation and accelerating development. We will be able to implement acquisition investments more transparently, and we will also have more possibilities in creating a motivational programme for the management staff, the vast majority of whom are currently employed by the subsidiary. In practice, we are also transferring funds from operational activities, accumulated in the subsidiary, to the company listed on the Warsaw Stock Exchange.”
The Fabrity Holding valuation for the merger takes into account an overpayment of income tax resulting from the use of a holding company relief when selling subsidiaries, a portion of which has already been recovered. In June, the tax office returned Fabrity Holding’s Corporate Income Tax (CIT) overpayment for 2023 (1.79 million PLN, RB 45/2024) and a similar application for refund also applies to the tax for 2022 (almost 2.5 million PLN). The Fabrity Holding Board, due to the significant likelihood of receiving this amount from the tax authority, reclassified this receivable from highly uncertain and off-balance sheet to a balance sheet receivable. As a result, the standalone net result for Fabrity Holding for the first half of 2024 is estimated to exceed 4.8 million PLN, while the consolidated net result for this period is estimated to exceed 6.8 million PLN (the report for the first half of 2024 will be presented on August 30).
Source: https://ceo.com.pl/fabrity-holding-planuje-wyplacic-dywidende-zaliczkowa-i-uproscic-strukture-grupy-kapitalowej-12782
