2.7% Treasury Stock Cancellation and 100% Stock Dividend
Capital Surplus Converted to Retained Earnings for Tax-Free Dividend
3Q Operating Profit 10 Billion KRW, Net Profit 4.2 Billion KRW
Redcap Tour announced a large-scale shareholder-friendly policy as part of its corporate value-up initiative.
On the 8th, Redcap Tour disclosed shareholder-friendly policies including treasury stock cancellation, a 100% bonus issue, and tax-exempt dividends through a public announcement.
The target for stock cancellation is 229,069 shares of treasury stock held by the company. This corresponds to 2.7% of the total issued shares and is approximately 4.1 billion KRW based on book value. The cancellation will be funded by retained earnings, reducing the total number of issued shares but not the capital stock. This measure aims to enhance the value per share and return more value to shareholders. The scheduled cancellation date is November 11.
Following the treasury stock cancellation, a 100% bonus issue will be conducted. Without diluting existing shareholders’ stakes, the capital stock will increase from 4.3 billion KRW to 8.5 billion KRW, and the total number of issued shares will double from 8.36 million to 16.72 million shares. This is a measure to expand Redcap Tour’s capital and increase stock liquidity. Existing shareholders will see an increase in the number of shares they hold. The bonus issue is expected to help resolve the current issue of insufficient trading volume. The record date for new share allocation is the 25th of this month.
An extraordinary general meeting of shareholders will be held to discuss the reduction of capital reserves. By converting capital reserves into retained earnings and distributing tax-exempt dividends to shareholders, this measure aims to effectively return corporate profits. The increased distributable earnings amount to 48 billion KRW and can be used as a source for tax-exempt dividends starting next year. The extraordinary general meeting is scheduled for the 20th of next month.
In the third quarter, Redcap Tour recorded consolidated sales of 83.1 billion KRW and operating profit of 10 billion KRW. Compared to the same period last year, sales decreased by 1.1%, but operating profit increased by 2.4%. Ordinary profit rose by 2.8% to 5.2 billion KRW, and net profit increased by 2.5% to 4.2 billion KRW.
The cumulative performance for the third quarter showed consolidated sales of 267.6 billion KRW and operating profit of 35.2 billion KRW, up 7.4% and 21.0% respectively compared to the same period last year. Ordinary profit increased by 32.2% to 21.2 billion KRW, and net profit rose by 31.7% to 16.7 billion KRW. The operating profit margin improved from 11.7% to 13.1% during the same period, and the debt ratio decreased from 263.7% at the end of last year to 230.3% at the end of the third quarter this year. The company is focusing on improving profitability and strengthening financial stability this year, achieving positive results across all financial indicators.
By business segment, the rental car division’s cumulative sales for the third quarter reached 237.4 billion KRW, a 7.4% increase year-on-year, and operating profit rose 21.2% to 30.7 billion KRW. Vehicle rental sales recorded 154 billion KRW, up 5.6% year-on-year, and used car sales increased 10.7% to 83.4 billion KRW. The travel business posted cumulative sales of 30.2 billion KRW and operating profit of 4.5 billion KRW, up 7.3% and 19.9% respectively compared to the same period last year.
Redcap Tour CEO In Yoo-sung stated, "These series of measures are part of our corporate value-up efforts to return tangible value to shareholders," and added, "We believe this decision, based on confidence in future growth and profitability, will further strengthen trust between the company and its shareholders." He continued, "We will continue to pursue profitability-centered management for sustainable growth," and "We will strive to become Redcap that actively shares achievements and meets the expectations of the market and society."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
