Special dividend in the offing for Trencor shareholders

21 February 2013

A special dividend of approximately 360 cents per share is in the offing for shareholders of Trencor Ltd which owns 48,9% of New York-listed Textainer Group Holdings Ltd, the world’s largest lessor of marine containers.

This would be in addition to a final dividend of 150 cents per share declared in respect of the year to December 2012. The total dividend of 215 cents per share for 2012 is a 23% increase on the 175 cents per share paid in 2011.

Announcing its 2012 results today, Trencor said net proceeds of US$75 million from the sale in September 2012 by Halco Holdings Inc of 2,5 million shares in Textainer were intended to be distributed to the company. The distribution is subject to the approval of the board of Halco Holdings Inc and the trustee and protectors of the Halco Trust. Trencor is a discretionary beneficiary of the Halco Trust, the sole shareholder of Halco Holdings.

Trencor said that subject to this approval, its board intended to pay the special dividend of approximately 360 cents per share in the second quarter of 2013.

Neil Jowell, Trencor’s executive chairman, said the company’s adjusted headline earnings per share for 2012 increased by 13,2% to 541,6 cents from 482,4 cents in 2011. This excluded the effect of net unrealised foreign exchange translation gains. Including the effect of net unrealised foreign exchange translation gains, headline earnings per share were 559,6 cents against 559,3 cents in 2011.

Trading profit from continuing, operations after net financing costs, increased by 7% from R1 529 million in 2011 to R1 636 million.

Mr Jowell said that, although the interest in Textainer had dropped to 48,9% from 60,8% in 2011, Trencor’s net asset value on 31 December 2012 was R53,54 against R47,65 the previous year. This value was based on the spot exchange rate of R8,48/US$ and the price of US$31,46 per Textainer share on the NYSE on 31 December.

Textainer’s fleet utilisation had continued at high levels, with the average for the year at 97,2%, compared with 98,3% for 2011. Long-term and direct financing leases applied to 82% of the fleet. Total capital expenditure for both the owned and managed fleets was US$1,2 billion for the year, used to purchase new and used containers.

Mr Jowell said Textainer had also increased its ownership of containers. At 31 December 2012, Textainer owned 72,7% of the total fleet of 2 775 000 containers while a year before it owned 58,6% of the then fleet of 2 469 000. He said Textainer earned significantly more on owned containers than managed containers.