Marketing services firm WPP Scangroup #ticker:SCAN is set to announce the dates for its books closure and Sh2 billion special dividend payment after completing the sale of its 60 percent stake in Kantar Africa.
The Nairobi Securities Exchange-listed firm received Sh5 billion in the transaction that was completed on June 30, 2020.
Scangroup says it will use at least 40 percent of the proceeds (Sh2 billion or Sh4.7 per share) to pay the special dividend.
“The board of WPP Scangroup will decide on the use of proceeds and the dividend to be recommended to shareholders, which the board expects to be at least 40 percent of the net proceeds, in line with the shareholders circular dated April 30, 2020,” the company said in a notice.
“An announcement in this regard will be made immediately following the meeting.”
The company had committed to making the distribution later this year and will soon announce the actual dates for closing its shareholder register and the dividend payment.
Scangroup could receive an additional Sh480 million from the disposal of its Kantar Africa stake.
The extra compensation is in the form of profit-sharing in the subsidiary for the period leading up to the conclusion of the transaction and payouts tied to the unit’s indebtedness.
The disposal will reduce the company’s revenue and geographical diversification in the short-term but will boost its cash pile.
Scangroup’s net profit dropped 20 percent to Sh491.4 million in the year ended December 2019 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.