Press release from CNW Group
IBI Group Inc. announces suspension of its quarterly dividend to shareholders
Wednesday, May 22, 2013
IBI Group Inc. announces suspension of its quarterly dividend to shareholders18:41 EDT Wednesday, May 22, 2013
TORONTO, May 22, 2013 /CNW/ - IBI Group Inc. (the "Company") (TSX: IBG) today announced after careful consideration that the quarterly dividend on its common shares for the quarter commencing March 1st, 2013 and henceforth will be suspended, effective immediately. The distributions on the 5,025,778 Class B units of the IBI Group partnership (which are exchangeable for common shares), held by IBI Group Management Partnership, will similarly be suspended with respect to the quarter commencing March 1st 2013 and henceforth.
This decision is based on the Company's commitment to manage cash to strengthen its balance sheet and manage its operations through a difficult period. The recession that occurred in the fourth quarter of 2008 and its impact on the economies of the United States and Europe, affected IBI Group initially in the housing sector, in which IBI had relatively high exposure. IBI projects in social and transportation infrastructure have also been affected. Europe continues to contract, recovery in the United States is encouraging but tentative, and a slowdown is being indicated in the Canadian economy.
The Company has reduced, and will continue to reduce, staff in line with committed work to enhance productivity and profitability, as indicated previously. This, together with the suspension of the dividend will preserve cash for operations and to reduce debt.
The backlog of committed work continues to increase and the Company had positive cash flow in April and in May.
The Company will continue to closely monitor profitability and cash generated. It will revisit the dividend/distribution policy as the Company moves into solid and sustainable operations and an improved balance sheet.
About IBI GROUP INC. AND IBI GROUP
IBI Group Inc. is a TSX listed company which trades under the symbol "IBG". IBI Group Inc. holds an indirect 77% interest in IBI Group, a partnership (of a subsidiary of IBI Group Inc. and IBI Group Management Partnership) which, directly and through its subsidiary entities, provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development, being urban land, building facilities, transportation networks and systems technology. The remaining 23% of IBI Group is owned by IBI Group Management Partnership. On a partially diluted basis, assuming the exchange of its partnership units of IBI Group for common shares of IBI Group Inc., IBI Group Management Partnership together with affiliated entities holds a combined 41% interest in IBI Group Inc.
This news release contains forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward looking statements include, or may be based upon, estimates, forecasts, and statements as to management's expectations. Although IBI believes that the assumptions inherent in the forward-looking statements are reasonable, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. A number of factors could cause actual results to differ materially from those in forward-looking statements, including general economic, market or business conditions and the factors discussed in IBI Group Inc.'s Annual Information Form filed with the Canadian securities regulatory authorities. Undue reliance should not be placed on these statements, which only apply as of the date of this news release. IBI undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: IBI Group Inc.
For further information:
IBI Group Inc.
230 Richmond Street West, 5th Floor
Toronto, ON M5V 1V6
Tel: 416-596-1930, Fax: 416-596-8024