Billionaire investor Baloobhai Patel has acquired an additional 7.9 million shares of Bamburi Cement #ticker:BAMB worth Sh293.4 million, more than doubling his stake in the firm.
His ownership rose to 14.9 million shares equivalent to a 4.12 percent stake in the year ended December compared to 7.02 million shares (1.94 percent) in 2020, according to Bamburi’s annual report.
His enlarged stake, which has cemented his position as the largest individual shareholder in the company, is valued at Sh553.4 million based on the cement manufacturer’s closing price of Sh37 on Tuesday.
The increased investment came in a year when the company’s profitability improved while its share price traded in a narrow range.
Bamburi’s net profit jumped 22 percent to Sh1.38 billion, helped largely by increased sales on the back of a lucrative deal to supply the construction of the Nairobi Expressway and an uptick in demand by homebuilders.
The company has proposed to grow its dividend payout by 19.3 percent to Sh3.58 per share or a total of Sh1.29 billion for the review period.
This will be up from Sh3 per share or Sh1.08 billion it paid for the 2020 performance.
The firm’s share price ranged between Sh39.2 and Sh38 last year. The stock has dropped significantly from highs of Sh194 in early 2016.
The share price fall came as the company’s pre-tax earnings fell from highs of Sh8.4 billion in 2015 due to high operating costs and increased competition that held down cement prices.
Mr Patel bought the shares in a year that foreign institutional investors sold 7.43 million shares, cutting their holdings to 62.04 percent from 64.09 percent in 2020.
Bamburi’s parent firm Holcim Group, however, kept its controlling stake intact at 58.6 percent — equally split between investment vehicles Fincem Holding and Kencem Holding.