EABL interim dividend up for first time in three years
From left-Kenya Breweries Limited Managing Director Jane Karuku, EABL Group CEO, Andrew Cowan and group Chairman Charles Muchene during half-year results announcement last week. PHOTO | SALATON NJAU | NMG
What you need to know:
- The plan will see EABL pay its 24,923 shareholders a sum of Sh1.97 billion, up from Sh1.58 billion they received a similar time last year when it declared a Sh2 per share dividend.
- It marks the first time since 2012 for EABL to pay an interim dividend above Sh2 per share.
- The management attributes this to a strong performance in half year, even as it signals it will maintain or grow final year dividend from Sh5.50 per share.
The East African Breweries Limited (EABL) board has proposed an interim dividend of Sh2.50 per share, matching the payout last seen seven years ago.
The plan will see Nairobi Securities Exchange (NSE)-listed brewery pay its 24,923 shareholders a sum of Sh1.97 billion, up from Sh1.58 billion they received a similar time last year when it declared a Sh2 per share dividend.
It marks the first time since 2012 for EABL to pay an interim dividend above Sh2 per share. The management attributes this to a strong performance in half year, even as it signals it will maintain or grow final year dividend from Sh5.50 per share.
“Our current trajectory, following our half year performance continues to be strong. The EABL board is confident that a higher interim dividend will not have to be offset by a lower final dividend,” said the firm in an emailed response.
EABL net profit for six months to December 2018 grew 33 percent to Sh6.61 billion, being 91 percent of the profit it attained in full year ended June 2018.
Eyes will now be on the board’s payout for the final dividend which has been at Sh5.5 since 2016. EABL’s dividend policy is to distribute about 63 percent of net earnings to shareholders.
An upward adjustment to final dividend will see it approach or smash the 2012 record when final dividend was Sh6.25 per share, pushing total payout to Sh8.75 per share. Last year, total dividend payout was Sh7.5 per share totalling Sh5.93 billion.
Genghis Capital, an investment bank, said the EABL results were better than expected with the half year period performance being one of the best in the last four years. It added that the interim payout signals the brewery’s confidence in second half.
“This indicates management is confident that the company will be able to sustain the higher payout going forward. The higher payout should give the price a strong momentum from its current levels of Sh170,” said Genghis.
Having last paid a Sh2.5 interim dividend in 2012, EABL dropped that to Sh1.5 per share in 2013 and retained this until 2015. The payout was adjusted to Sh2 and that has been the rate up to last year.
