Betterware chairman defends pounds 9.8m dividend

Andrew Cohen, the executive chairman of Betterware, whose family effectively controls the catalogue retail group, yesterday denied that a special pounds 9.8m dividend was being paid to benefit his family just days before the possible election of a Labour government. The company announced it planned to make a one-off payment of 9.31p a share to accompany a final dividend of 2.52p for the last financial year. News of the payment, which comes a year after Betterware paid its first special dividend of 2.6p a share, helped the shares rise 10p to 122p yesterday.

Mr Cohen, who with his family owns around 46 per cent of the group's shares, is not unknown to controversy. Shares in the group crashed from 278p in 1993 to 38.5p in 1995 after the family raised pounds 31m from the sale of part of their stake just months before Betterware was forced to issue a series of profits warnings and announced a slump in its annual results.

One City observer said of the latest move: "There is a problem in paying out a pounds 9.5m dividend principally to yourself. You could say it's in the interest of all the shareholders, but is it in their interest to flush all of the cash into Mr Cohen's pockets just before a general election? I don't know."

Mr Cohen denied any selfish motives yesterday and said the decision to pay the dividend had nothing to do with the election, declaring himself "not a political animal".

The proposed special dividend was being made for the benefit of all the shareholders, he said.

Referring to his family and his fellow directors, he said: "We kept 50 per cent of the equity all the way through. As far as we are concerned, the company is very cash-generative and we have no plans for this cash."

He said there would have been other complaints if the group had used the money, some pounds 12.6m at the beginning of March, to buy in its shares, which might have raised earnings per share, boosting performance-linked executive bonuses, or increased the family's control.

The announcement came as Betterware announced a rise in pre-tax profits from pounds 9.29m to pounds 11.5m for the 12 months to 1 March.