Friday, 28 November 2014

JobStreet's dividend history (JOBST)

I noticed that JobStreet Corporation Berhad, listed on Bursa Malaysia as JOBST, had issued their latest quarterly report on its consolidated results for the financial period that ended on 30 Sep 2014. As a former staff of, I am naturally very interested to see what's happening to my former workplace especially when there is such a lot of interest in its future direction.

Now, (almost) everyone would already know that JobStreet has already finished with its final stage of disposing off its jobs portal business to SEEK Asia Investment, and in fact, the deal was concluded on the 20th of this month when SEEK Asia transferred RM1,562.8 million into JobStreet's account. On that day, JobStreet's founder, Mark Chang, stepped down as the CEO of the company.

This protracted negotiation of the Proposed Disposal of the jobs portal business by JobStreet to SEEK Asia had been going on for quite a while - since February this year - but it was not without its own nail-biting moments.

While it was generally accepted that the sale of the business would go through smoothly, it had been recognised that there could be some sticky moments with the Singapore authorities who were concerned that SEEK Asia could come to monopolise the jobs portal business in the Republic as the latter already owned JobStreet's greatest rival, JobsDB. Together, JobStreet and JobsDB would corner possibly more than 90 percent of the business in Singapore.

But after a lengthy period of fact-finding investigation - during which time, the shareholders of JobStreet were all nervously put on edge - the Competition Commission Singapore (CCS) concluded that there would be no infringement of their Singapore Competition Act (Cap. 50B) provided that SEEK Asia implemented and complied with their own Proposed Commitments and the Proposed Divestiture Commitment (which are both too lengthy for me to disclose here but can always be read from the CCS or SEEK websites). In issuing the favourable decision, CCS accepted the Proposed Commitments offered by SEEK Asia in order to address the potential competition concerns that may arise from the Proposed Disposals.

But back to this quarterly report, it more or less summarised a lot of the recent developments of the company. Amidst all the gobbledy-gook in the report is the news of the payment of the Special Single-Tier Dividend to JobStreet shareholders on Christmas Eve. Yes, the money that has been received from SEEK Asia will be returned to the shareholders and it will be worth RM2.65 per share. Although the news is welcoming indeed for clarifying the occasionally nail-biting situation, it also brings some sobering thoughts because the company that we have known since 1995 will no longer be the same anymore.

Throughout its 10 years of listing on the Bursa Malaysia, the company has been paying out dividends, but none as good as in the last two or three years. It was listed at the end of 2004 but for that year, no dividend was paid. In 2005, it declared a total dividend payment of 2.75 sen against an IPO price of 54 sen per share. In 2006, the dividend payment was a modest 1.5 sen.

In 2007, JobStreet declared a bonus issue of two ordinary shares for every ordinary share of 10 sen each, followed by an immediate consolidation of two ordinary shares of 10 sen each after the bonus issue into one new ordinary share of 20 sen each in the company. What this meant effectively was that if you had bought 10,000 shares of JobStreet at its IPO price of 54 sen in 2004, you would now end up with 15,000 shares at an adjusted IPO price of 36 sen at the end of 2007.

Subsequent to this bonus issue-cum-consolidation exercise, the company declared a total dividend payment of 5.0 sen for 2007, 3.5 sen for 2008 and 3.0 sen for 2009. In 2010, the company announced a new dividend policy to return approximately 50 percent of the company's profit after tax and minority interests to the shareholders. As a result, shareholders received dividend payments totalling 6.5 sen in 2010, 7.0 sen in 2011 and 9.25 sen in 2012.

In May 2013, there was again a new dividend policy to return up to 75 percent of the company's profit after tax and minority interests to the shareholders on a quarterly basis, and also a share split exercise in September. Dividend pay-out for that year amounted to 9.25 sen. (To receive a total dividend of 9.25 sen is akin to receiving an interest rate pay-out of 25 percent on your initial investment amount in 2004; an impressive return on investment.)

For 2014, the dividends declared for pay-out till today amounted to 5.25 sen, excluding the Special Dividend declared. But will there be a fourth interim dividend declared next year or indeed, will there be a final dividend too? Remember, JobStreet was still earning from its jobs portal business until the 20th of November when SEEK Asia finally transmitted their payment over into JobStreet's account. So we may jolly well expect the last of JobStreet's generous dividend payments to still come through.

For a person who had invested RM5,400 for 10,000 JobStreet shares in 2004, converted to 15,000 shares of 20 sen each in 2007 and 30,000 shares of 10 sen each in 2013 , he would have received back RM9,387.50 in dividends through the years. Not too bad a performance for a company that started out simply by matching jobs to job seekers way back in 1995 and grew into the finest Internet company in Malaysia, Singapore, the Philippines, Indonesia and India, and at one stage also with forays into Thailand, Bangladesh and Vietnam. The company still has on-going interests in Hong Kong, Taiwan and Japan.

No comments: