The applicability of shareholder value analysis in selected Maltese listed companies

Abstract

The purpose of this dissertation was to examine the applicability of SVA to selected Maltese listed companies. Interviews were held with either the finance director or the financial controller of Maltacom plc, Suncrest Hotels plc and Middle Sea Insurance plc. Certain conditions are necessary if SVA is to be applied effectively. Hence, these were looked into and several recommendations were made. The literature review mainly focused on the five-core value processes companies should possess in order to attain SVA. These are the following: 1. Corporate Value Strategies and Goals 2. Resource Allocation and Planning 3. Performance Management 4. Compensation 5. Value Communications and Reporting. The selected Maltese listed companies were examined in lieu to the above resources. From the study it can be concluded that SVA does have a potential in the future, but it seems that listed companies are not yet prepared and do not feel the need for such at the moment. However, if more local companies start going public and become listed on the Malta Stock Exchange, the need for SVA will be felt more. It was recommended that although SVA is not given priority at the moment, Maltese companies should look well into this theory and examine its benefits.