High share demand marks Carbacid and BOC return to NSE

For BOC, a takeover of Carbacid would have given it an easy entry point into the carbon dioxide business — which is doesn’t manufacture — providing the firm with an opportunity to rev up its revenues and create increasing shareholder value.

But after the failed bid, BOC plans to take on Carbacid’s hold on the carbon dioxide market in an onslaught it hopes will tip the earnings scale in its favour.

Harsh year

Carbacid recorded Sh256 million in after tax profits this year, accounting for a 54 per cent increase from 2008.

The firm’s revenues showed little signs of relenting in a harsh economic year, recording Sh552 million compared to Sh387 million in 2008.

BOC’s turnover, on the other hand, grew from Sh987 million in 2005 to Sh1.2 billion in 2008, while its profits grew marginally from Sh291 million to Sh295 million in the same period.

Some investors in both BOC and Carbacid will be keen to unlock the value of their investments.

But acting as a double edged sword that also saved both firms from the two year bear run that has since dictated proceedings, the suspension staved off the massive share price falls that has befallen other listed stocks since 2007.

At a time when the stock market is running flat and investors are still edgy about trading in equities, an overwhelming attraction for existing shareholders could be to the retention of the shares for a tidy dividend payout.

Last year for instance, BOC paid out a dividend of Sh6.80 for its full year ending December 2008 while Carbacid announced a proposed dividend of Sh10 and a special dividend of Sh5 per share.