Alico (ALCO) Announces Substantial Increase in Dividend, Additional Ranch Land Sales
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Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today announces significant activities that will continue to support its business strategy and generate greater returns for our shareholders.
The Alico Board of Directors approved an increase in the quarterly dividend from $0.18 per common share to $0.50 per common share, which represents an approximate 178% increase, effective the third quarter of fiscal year 2021. Our current common dividend yield based on Friday’s, June 11, 2021 closing stock price was 2.26%, at the same share price, the increased annual common dividend yield would exceed 6%.
In our press release dated May 5, 2021 describing “Strategic Actions to Increase Long-term Shareholder Returns,” we disclosed that we were under contract to sell, or in final negotiations to sell, approximately 15,000 additional acres of the Alico Ranch. Since that announcement, we have sold approximately 12,500 acres. In early June 2021, the Company sold approximately 11,700 acres, which were encumbered by an easement, to a third-party for approximately $12.2 million. In 2013, these acres were enrolled in the Wetlands Reserve Program (“WRP”), which calls for the restoration and maintenance of the property for the duration of the WRP easement. As part of that enrollment in 2013, Alico received approximately $1,800 per acre. In addition, in early June 2021, we also sold 763 acres to two independent third parties for approximately $3.5 million.
With respect to our previously announced Environmental, Social and Governance (ESG) initiative, Alico has made substantial progress, including:
- A new board-level Sustainability and Corporate Responsibility Committee has been established by the Alico Board
- A full-time executive has been named Director of Sustainability to lead our ESG program
- Management has formed a broad Sustainability Task Force across our business units
- Alico has engaged consultants to produce an annual Sustainability Report by year end
- Alico Sustainability Polices and a Vendor Code of Conduct have been formulated
- Our initial Carbon Footprint and Climate Risk evaluation has been prioritized
- Plans are underway to revitalize and increase Alico’s Social media presence, to better highlight our policies relating to ESG
John Kiernan, Alico’s President and Chief Executive Officer, commented, “The Board of Directors decision to substantially increase our common dividend to a $2 annual level reflects their continued confidence that our business strategy supports a higher level of return of capital to our shareholders. We are also pleased with the continued buyer interest in our Ranch land, which has allowed us to close sales transactions at premium prices. As reported last month, Alico will use these asset sale proceeds to continue to retire portions of our remaining $39 million of variable rate term loans, which will further improve subsequent annual cash flow as future debt service is eliminated.
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