Listed firms raise dividend pay to Sh130 billion

Nairobi Securities Exchange trading floor. FILE PHOTO | NMG

Dividend payout by all of companies listed on the Nairobi Securities Exchange (NSE) has risen to a record Sh130.3 billion in their latest respective financial years on the back of earnings recovery from the impact of the Covid-19 scourge.

This represented a 53.5 percent jump from the total payout of Sh84.9 billion a year earlier –which marked a large decline that jolted years of a steady increase in cash distributions.

East African Breweries Plc (EABL), Absa Bank Kenya, and Equity Group are among companies that resumed dividend payouts while others such as Car & General and Carbacid Investments enhanced their payouts, helping to set the new payout record.

The latest full-year payouts indicate that the entire market –currently valued at Sh2.18 trillion— has a dividend yield of about six percent.

The cash return ratio has been weighed down by scores of firms that have not paid dividends for years including Eveready East Africa, Kenya Airways, Britam Holdings, WPP Scangroup, and TransCentury.

The dividend analysis excludes foreign firms cross-listed on the NSE and, which have a small base of local shareholders.

Most of the publicly traded companies have December as their yearend but there are a few that close their books in September, March, June and July.

An analysis by Business Daily shows that Safaricom, Equity Group, KCB Group, EABL, Standard Chartered Bank Kenya and Absa Bank Kenya were the firms with the largest dividend distributions.

The record payout is boosting returns for stock market investors including individuals and institutions.

Data was sampled from the last five years annual reports, which showed that Safaricom had the highest payout in all the last years.

The telco raised its payout to Sh55.6 billion in the year ended March compared to Sh54.89 billion a year earlier.

The country’s most profitable firm accounts for nearly half of all the cash distributed by publicly traded companies. The telco has maintained a policy of disbursing 80 percent of its net income to shareholders.

Equity, which skipped dividends in two years of the pandemic, returned to fork out a record Sh11.3 billion in the year ended December. The bank developed a new policy of paying out between 30 percent and 50 percent of its net earnings.

KCB paid a dividend of Sh9.6 billion for the same period, with the amount still lower than the peak payout of Sh11.2 billion in 2019.

The country’s second-largest bank had cut its dividend to a low of Sh3.2 billion in 2020 as it also sought to ride out the crisis while pursuing acquisitions in the region.

KCB previously paid out about half of its net income but has dropped below that level as it makes acquisitions in the region, with the latest being the proposed purchase of an 85 percent stake in DRC’s Trust Merchant Bank for Sh15 billion.

EABL resumed paying dividends in the year ended June with an Sh8.6 billion payout after reporting strong growth in sales and profit, a performance linked to economic recovery and lifting of Covid-related restrictions that had hurt sales of alcohol products in bars and other establishments.

Stanchart lifted its payout 80.9 percent to a new record of Sh7.1 billion in the year ended December while Absa resumed payment of dividends in the same period at Sh5.9 billion.

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Note: The results are not exact but very close to the actual.