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WPP stock retreats, Uchumi at new low

WPP Scangroup chief executive Bharat Thakrar
WPP Scangroup chief executive Bharat Thakrar. FILE PHOTO | NMG    

Shares of listed marketing services firm WPP Scangroup #ticker:SCAN retreated 2 percent to Sh19.65 on Friday, after Thursday’s rally to Sh20.05 that marked a high of one year and seven months.

The rally was sparked by the company’s announcement of a special Sh1.7 billion dividend payout from Sh284 million a year earlier.

The company reported a 28.3 percent jump in net profit for the year ended December to Sh612 million from Sh477 million a year earlier on the back of a 9.27 percent increase in revenues to Sh4.5 billion from Sh4.12 billion posted a year earlier.

Following the performance, the firm’s board declared a final divident of Sh1 per share, a 33.33 percent rise from the Sh0.75 announced the previous year.

In addition, the firm announced a special dividend of Sh3 per share, bringing the total payout to Sh4.

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Earlier on Thursday, at the Nairobi Securities Exchange (NSE), Scangroup shares zoomed 71.37 per cent to close at Sh20.05 from Wednesday’s Sh11.7 at close of trade.

The jump marked a two- year high.

“The board of directors recommend a final dividend of Sh1 per share (2017: Sh0.75 per share) for the year ended 31 December 2018 and a special dividend of Sh3 per share subject to shareholder approval at the annual general meeting to be held on 10 May 2019,” said the advertising company.

“The dividend will be paid from the retained earnings of the company which stood at Sh1.79 billion as at December 31, 2018.”

This came as Uchumi Supermarkets share price Thursday touched an all-time low of Sh0.49 since the stock was readmitted at the bourse on May 31, 2011.

Uchumi investors were seen to react to uncertainty about the firm’s future following a delay in its earnings release.

Investors in the listed retailer remain in the dark as the troubled retailer is yet to publish its financials for year ending June 2018 in the latest regulatory breach.

On Thursday, Capital Markets Authority, (CMA) chief executive Paul Muthaura remained mum on possible enforcement actions by the regulator against the troubled retailer in wake of the earnings release delay.

“Given this is a matter currently under consideration and implementation, I cannot at this time provide the requested details,” Mr Muthaura told the Business Daily on phone.

Analysts said earlier the regulator, must arrest such breaches by enforcing the law to protect investors. They added that it was crucial in ensuring an orderly market.

Actions the CMA can take include suspending the retailer from trading or penalising it.

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