Despite making loads of cash as profit, any time soon, several employees at Botswana Telecommunications Limited (BTCL) the sole listed telecommunications company will lose their jobs due to the ongoing restructuring exercise aimed at creating efficiency, more money for shareholders, this publication can reveal.
According to the company spokesperson, Golekanye Molapise, BTCL is currently undergoing an organizational structure review to ensure alignment with the company’s recently revised strategy. He said the strategic alignment is meant to enhance operational efficiency across all BTCL divisions. He revealed that the exercise has been ongoing since July 2017 and is being undertaken in compliance with the country’s labour laws and internal consultative processes. “The impact on the human capital will be known upon the completion of the exercise,” he said when asked how many people will be laid off. This publication also contacted BTCL Union President Masego Gobotswang, who however declined to respond instead directing questions to BTCL Executive Management. BTCL Union is supposed to be independent from the executive management in its advocacy for the rights of workers and ensuring that BTCL employees are treated fairly. Post listing on Botswana Stock Exchange (BSE), BTCL undertook a skills gap and skills alignment assessments to make sure it has the right people doing the right jobs at any point in time. BTCL implemented a Performance Management System (“PMS”) which aims to establish a performance-based culture through robust measurement of business targets across all divisions. According to sources, BTCL also aims to create efficiency by having minimal employees to save more money for the shareholder.
CONTROLLING SHAREHOLDERS AT BTCL
Government is the largest shareholder at 51 percent. Botswana Public Officers Pension Fund (BPOPF) has indirectly, through 5 of its fund managers, purchased 44 888 900 shares during the Initial Public Offering (IPO). This makes the fund to indirectly own 4.2 percent shares, making it the second largest after government. However, three rich families in Botswana are significant shareholders. Leading the pack is the Kader family, which consists of shrewd businessmen, who have however managed to remain unknown to many people in Botswana yet they have made millions of Pula over the years in the country.
A peek into the BTCL shareholders book, the family bought a shedload of shares using 7 of its family members. As a collective, the Kader family owns 6 241 126 shares in BTCL, which means the family paid a whopping P6 241 126. After such a massive investment, the Kader family as a unit (consolidating all shares bought by individual members of the family) is the largest private investor in the BTCL shares. The family owns the Options Franchise in Botswana, the affluent middle class clothing retail store. They also own Steel Base (Pty) Ltd, a steel manufacturing company in Botswana.
Further, the family owns Northgate Mall in Gaborone, opposite Sebele Shopping Centre as well as all that land from the Fire Department offices in Sebele to the Traffic lights by the Sebele Mall-Airport intersection. Mobile Phone chain company, Cell City, which is also a nationwide company, is also controlled by the Kader family, as well as a number of Shell filling stations in Botswana. Satar Dada’s family also are significant shareholders. The family bought shares using 9 of the immediate family members and children, while an additional 5 people are those associated to Dada by marriage. Collectively, they bought 5 384 400 shares, an equivalent of the same number in millions of Pula since BTCL sold each share at P1. Further, the Derek Brink family also managed to secure 0.3 percent shareholding in BTCL.
ANALYSTS POSITIVE ON BTCL PERFOMANCE
Although the company is retrenching, it is however doing well in the market and analysts at brokerage firm Motswedi Securities are confident that it will remain profitable and that share price liquidity will also be on the rise. According to Garry Juma, Head of Research at Motswedi Securities the selling pressure on BTCL shares which has been prevailing since the beginning of this year has dissipated since the beginning of May with the market for BTCL shares shifting into a ‘sellers’ market.
As a result, BTCL recovered by 8.8 percent to close the week at 111 thebe due to more buying from investors. A sellers’ market is when demand exceeds supply, giving sellers an advantage over buyers in price negotiations.
“The sudden change in the fortunes for BTCL shares doesn’t surprise us as BTCL selling pressure was not based on any fundamentals but was due to profit taking and to some extent retail investors offloading their shares to meet their obligations,” said Motswedi researchers.
BTCL share price fell from a high of 135 thebe on 12th April 2016 to a low of 84 thebe on the 16th August 2016 due to selling pressure.
This selling pressure at that time changed overnight after the release of BTCL financial results and this attracted investors with the market turning into a sellers’ market overnight. The buying pressure was supported by the subsequent release of BTCL interim and full year financials which pushed BTCL share price to a time high of 185 thebe on 20th December 2017. The only difference this time around is that the buying momentum has kicked in much earlier before the results are out.
With BTCL now on closed period and the results for the year ended 31st March 2018 expected to be out before the end of June 2018, value-based investors are now taking advantage of the current lower price to acquire the stock, with expectations of good results.
BTCL dividend policy is one of the best in the market and most investors are fully aware of this. Juma said with the results expected in a few weeks’ time and the expected dividend that will follow, most investors are acquiring the stock to cash in from the projected dividend. During the previous financial year, BTCL made P237 million in profit after tax, and expectations are that profits could even be higher.