Olympia lifts dividend freeze, eyes new deals

Investment firm Olympia Capital will make new acquisitions next year to complete its turnaround plan that saw it pay a dividend after returning to profitability last year.

Chief Executive Michael Matu said the company is eyeing South Sudan’s construction sector and is seeking approval from its shareholders to close deals of at most Sh30 million without seeking their nod.

The acquisitions will see the firm break its six-year deal-making drought that has seen it trail its peers TransCentury and Centum Investment.
Olympia said its net profit for the year ended February was at Sh42.8 million compared to Sh35.1 million a year earlier.

This saw it declare a dividend of Sh0.10 a share.

“We are looking for opportunities in South Sudan in our mainstay building material and real estate business,” said Mr Matu.

Olympia is seeking authorisation to close deals valued at a maximum of 20 per cent of its 40 million authorised share capital that stands at Sh146 million based on its current share price of Sh3.65 at the Nairobi Securities Exchange.

The shares have shed 13.1 per cent in the past year and stockbrokers reckon that they receive little investor interest due their slump into loss-making.

Market analysts say prospects for recovery of the stock lies in investors’ perception of Olympia’s turnaround efforts and its ability to pay dividends.

Mr Matu said that the application to the CMA is aimed at avoiding the risk of losing good deals from shareholder approval delays.

Analysts say such delays can lead to a significant change in the valuation of the assets to be acquired or sold.

The company’s focus on South Sudan comes at a time when the new republic is expected to spend billions of shillings in construction of private, commercial and public buildings and infrastructure.

This is set to boost demand for goods like PVC, vinyl floor tiles, mirrors, and doors which Olympia supplies.

The entry into South Sudan will add on to the company’s current geographical presence in Kenya, Botswana and South Africa.