Marketing services firm Scangroup has delayed the declaration of a dividend for the year ended December following uncertainty over the completion of the sale of its subsidiary Kantar.
The Nairobi Securities Exchange-listed firm had earlier projected that it would have disposed of its 60 percent interest in the data and research firm by March.
The transaction, which is expected to result in gross proceeds of about Sh5 billion and a gain of Sh2.6 billion, is now scheduled to be completed by June 30.
Delay of the sale, coupled with the adverse economic effects of the Covid-19 pandemic, has seen Scangroup postpone making a decision on dividend.
“The board has considered the events that are taking place relating to the unprecedented Covid-19 pandemic and its effects on the Kenyan economy and on the world at large,” the company said in a statement.
“Our company and the industry it represents will also have to weather the storm and remain steady for the forthcoming economic challenges. Keeping this uncertainty in mind the board has decided to defer the dividend declaration for the financial year 2019.”
The decision came after the firm’s net profit dropped 20 percent to Sh491.4 million in the year ended December compared to Sh612.2 million a year earlier.
This was despite sales rising 13 percent to Sh5 billion from Sh4.5 billion. Scangroup said its bottom-line was hit by a mix of foreign exchange losses and reduced interest income on its cash holdings.
If the sale of Kantar is concluded within the new timeline, the company’s shareholders can expect to be paid dividends amounting to Sh4.6 per share or a total of Sh2 billion, according to its earlier guidance.