Pan Africa Insurance’s share price gained the most last week despite
reporting a decline in profit after tax for the full year 2014. FILE
PHOTO | NATION MEDIA GROUP
Pan Africa Insurance’s share price gained the most last week
despite reporting a decline in profit after tax for the full year 2014.
The
insurer, on Friday, reported a 30 per cent decline in full year profit
after tax to Sh872 million from Sh1.25 billion recorded in 2013.
Its
share price on the Nairobi Securities Exchange, however, gained the
most by 14.29 per cent to Sh120 apiece as at the end of trading on
Friday, February 27, from Sh105 a week earlier on positive investor
sentiment following a bonus dividend issue.
“This is
in lieu of a cash dividend as we will utilise the surplus cash on our
new office development and the acquisition of Gateway,” the management
said upon releasing of the firm’s 2014 results.
This
comes a week after the insurer, which is controlled by South Africa’s
Sanlam, issued a profit warning, saying its full year earnings for 2014
could drop by at least 25 per cent.
UNREALISED GAINS
The
firm’s full year performance was hit by a slump in unrealised gains in
unlisted equities and under-performance of property sales.
The
firm, however, said that its three business divisions — life, asset
management and loans — exceeded the comparative 2013 operating profit.
“Investment
income on shareholders’ assets declined by 34 per cent mainly due to
decrease in unrealised gains in unlisted equities compared to 2013.
Demand for our property was depressed in 2014 compared to 2013 but we
expect this to pick up again in 2015,” the firm said.
Analysts
said the insurer’s price on the stock market received support from
positive investor sentiment after the insurer declared a bonus dividend
of one share for every two held.
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