Kenya’s Britam raises dividends by 67pc
British American Investments Company (Britam) has raised its dividend pay-out by 67 per cent, in its first full year of operations as a listed company.
The company on Thursday said that it would pay out Ksh0.25 ($0.003) in dividends for the year ended December 2012 up from Ksh0.10 ($0.001) paid out for the year ended December 2011.
Benson Wairegi, group managing director of Britam, which listed its shares at the Nairobi Securities Exchange (NSE) in September 2011 after raising Ksh3.51 billion ($37.87 million) in an initial public offer, said that the company will continue to pay dividends but will also retain funds for growth.
“We shall pay dividends but we also want to reinvest the bulk of the money into the business,” said Mr Wairegi.
He disclosed that the company plans to enter Rwanda and Tanzania by the end of this year after entering South Sudan in 2012.
Its subsidiaries are British American Insurance Company in Kenya, British American Insurance Company Uganda and British American Asset Managers.
As at the close of trading on Wednesday, Britam shares had appreciated by 49.17 per cent to close at Ksh8.95 ($0.10) when compared to Ksh6 ($0.07), its closing price at the end of last year.
Britam posted a consolidated comprehensive profit after tax of Ksh4.18 billion ($48.68 million) for the period ended December last year compared to Ksh4.18 billion ($49.21 million) loss after tax for the period ended December 2011.
The stellar performance of equities at the Nairobi bourse last year helped Britam’s investment portfolio while gross revenues mainly from the insurance business rose 24 per cent to Ksh7.2 billion ($84.07 million) from Ksh5.84 ($68.72 million).
Mr Wairegi said that the investment portfolio registered investment income of Ksh5 billion ($58.16 million) in 2012 as the market recovered compared to a loss of Ksh2 billion ($23.51 million) in 2011 when the market was on a down turn.
Gladys Karuri, Britam’s group finance director said that the company has been diversifying its investment portfolio to guard against fluctuations in profits and that the goal was to bring down equity holdings to at most 30 per cent.
As at December last year equities accounted for 31 per cent of the company’s assets, followed by fixed income and other assets at 20 per cent each, unit trusts at 17 per cent, cash deposits at 7 per cent and investment property at 5 per cent.
“Fluctuation of earnings is something we want to monitor. We want equities to make not more than 30 per cent of assets,” said Ms Karuri adding that in future the property class should account for 25 per cent of the assets.
Equity Bank, one of its associate companies gave Britam a dividend of Ksh394 million ($4.58 million) while the share of profit from Housing Finance, its other associate company rose 85 per cent to Ksh146.8 million in 2012 from Ksh79.4 million in 2011.
Analysts at Standard Investment Bank (SIB) said that fair value gains on financial assets of Ksh3 billion as at the end of December 2012 came from Equity Bank’s share price gains compared fair value loss of Sh2.9 as at the end of December 2011.
“The share of profit of associate from Housing Finance increased 4.9 per cent. The company expects the reported earnings momentum to be maintained into 2013, with a focus on new markets such as Tanzania and Rwanda as well as expansion in South Sudan” said SIB in their Thursday morning brief to investors.