British American Investments Company (Britam) has raised its dividend payout by 66.7 per cent after it returned to profitability, helped by rebound of the Nairobi Securities Exchange (NSE) last year.
The firm Thursday announced a profit of Sh2.5 billion in the year to December, recovering from a Sh1.7 billion loss a year earlier.
This helped the company increase its dividend pay to Sh0.25 a share from Sh0.15 which is a boon to investors including its chief executive Benson Wairegi, investment banker Jimnah Mbaru and businessman Peter Munga who have seen the value of their shares in the firm increase by 20 per cent over the past week.
On Thursday the share lost 5.02 per cent to stand at Sh8.50 as investors booked profits from the recent rally and it has gained 35 per cent over the past three month, but it remains below the 2011 IPO price of Sh9.
The company, which has insurance, asset management and property development businesses, attributed the recovery to higher revenues from sale of insurance policies and investment income.
Mr Wairegi said that income from the group’s investment portfolio rose Sh5 billion during the period up from a loss of Sh2.1 billion in 2011, helped by the stronger performance of the financial markets last year with the benchmark share index of the NSE and Kenyan bond yields going up.
“This was due to growth in our core insurance business aided by excellent growth in investment income given the bullish markets over the past year,” said Mr Wairegi.
The NSE-20 Share index returned 28.95 per cent last year compared 30 per cent decline in 2011.
Gross revenue from the company’s insurance and asset management arms grew by nearly a quarter to Sh7.2 billion shillings. The group, which operates in Uganda and South Sudan, said it plans to expand into Tanzania and Rwanda before the end of this year and deepen its real estate investments. The firm said it was setting up a Sh10 billion property fund to build homes, office blocks and shopping malls.
(Read: British American eyes real estate after Sh2.2bn share sale)
The performance will see the firm’s top shareholders earn millions of shillings in dividend. Mr Mbaru will earn Sh54.8 million from his 219.3 million shares in the firm worth Sh1.86 billion.
Mr Munga, the Equity Bank chairman, will take home Sh86.3 million from his 345.1 million shares while the bank’s CEO James Mwangi and his wife will together receive Sh30 million in dividends. Mr Munga is the second largest shareholder of the firm with shares worth Sh2.93 billion.
Mauritian investor Dawood Rawat who owns 385.5 million shares worth Sh3.27 billion will earn Sh96.4 million in dividends. Mr Wairegi, who is also a director in Equity Bank, will receive Sh25 million for his 100.2 million shares.