Business
Crescendo Partners sends letter to Board of Imvescor Restaurant Group, Inc.
NEW YORK , Sept. 22, 2014 /CNW/ - Crescendo Partners, a shareholder of Imvescor Restauran...
About this update from Mty Food Group Inc.
[{"type":"text","content":"\n\nNEW YORK, Sept. 22, 2014 /CNW/ - Crescendo Partners, a shareholder of Imvescor Restaurant group, Inc.  (\"Imvescor\" or the \"Company\") (TSX: IRG) today announced that it has delivered a letter to the Board of Directors of the Company. In the letter, Crescendo Partners urges the Board of Directors of the Company to implement a meaningful annual dividend of $0.12 to $0.15 per share, which would imply a dividend yield of between 6.9% and 8.6%, respectively.  \n\nThe full text of the letter is as follows:\n\nSeptember 22, 2014\n\nImvescor Restaurant GroupAttn: Board of Directors774 Main Street, Suite 400Moncton, NBE1C 9Y3\n\nDear Board of Directors:\n\nCrescendo Partners and its affiliates control very close to 10% of the outstanding stock and warrants of Imvescor Restaurant Group L.P. (\"Imvescor\" or the \"Company\"). We invested in Imvescor over a year ago, due to its strong cash flow generation, its high return on invested capital (ROIC) franchisor business model, and the significant upside in the stock price due to what appeared to us to be material undervaluing by the market. Unfortunately, this undervaluing has persisted. One of the main reasons we believe the stock is still trading at a significant discount to its peers is its lack of a dividend. We strongly believe that the Board should implement a meaningful annual dividend of $0.12 to $0.15 per share payable quarterly, which would imply a dividend yield of between 6.9% and 8.6%, respectively.\n\nA $0.12 to $0.15 dividend is indeed appropriate as it will result in the company paying shareholders between $5.1 million and $6.5 million annually1  implying a dividend payout ratio of between 40% and 55% of the LTM free cash flow2, respectively. Since fiscal 2011 (year-end October 2011) the Company has generated free cash flow of $7.3 million in 2011, $10.5 million in 2012 and $9.7 million in 2013.  Furthermore, during the last twelve months, Imvescor has generated $11.7 million of free cash flow.  Based on our expectations for 2015 and beyond, we consider that a dividend of this size will be entirely manageable and will help to highlight the value inherent in Imvescor's stock. Clearly, the initiation of a dividend will substantially enhance market confidence by virtue of its reflection of the Company's own confidence in it...