The share price of WPP Scangroup #ticker:SCAN Tuesday rose 26.2 percent to Sh22.1, adding Sh1.9 billion to the market capitalisation of the marketing services firm.
Investors rushed to buy the Nairobi Securities Exchange-listed firm’s shares to beat the books closure for its special dividend of Sh8 per share or an aggregate of Sh3.4 billion.
The dividend, which represents a yield of 36.1 percent based on yesterday’s closing price, will be paid within one month to shareholders on the register as of July 28.
The stock rally, which saw the counter hit a high of Sh25, lifted Scangroup’s market value to Sh9.5 billion from Sh7.5 billion on Monday.
The volume of shares traded yesterday surged to 2.5 million units in deals valued at a total of Sh56.1 million.
Scangroup now has the highest dividend yield among the publicly-traded firms, with some of the blue-chips cutting back on cash returns to shareholders citing the need to preserve capital in the wake of the Covid-19 pandemic.
Equity Group, for instance, cancelled its earlier proposed payout of Sh2.5 per share (Sh9.4 billion total) while Standard Chartered Bank #ticker:SCBK is cutting its aggregate distribution 37.5 percent to Sh12.5 per share (Sh4.3 billion) for the year ended December 2019.
Scangroup’s upcoming special dividend expands its generous cash distributions that started in the payout for the year ended December 2018.
For that period, the company paid a total of Sh1.7 billion or Sh4 per share, including a special dividend of Sh3 per share.
The company, which has historically held surplus cash, recently found itself with even more money after selling its Kantar business in Africa for Sh5 billion.
“The funds received from the disposal will result in a cash surplus in the company,” Scangroup told shareholders ahead of the completion of the sale of the subsidiary in June.
The company had earlier said it would distribute at least Sh2 billion or Sh4.7 per share from the proceeds arising from the transaction but raised the amount 70 percent to Sh3.4 billion or Sh8 per share.