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Equity Group will resume dividend payments to its shareholders this year, after riding out the Covid-19 pandemic storm which led to withholding of dividends worth Sh9.4 billion in preference to cash preservation.

Group Managing Director and Chief Executive James Mwangi told shareholders yesterday during a virtual Annual General Meeting (AGM) that the level of risk mitigation the group undertook after the outbreak of the pandemic in 2020 was sufficient to provide a buffer against uncertainty, while improving earnings and the return outlook.

“The board is now confident that the measures taken have borne fruit and the group will be able to resume payment of dividend for 2021 as it has done consistently since the company was listed in 2005,” said Mwangi.

He said following the pandemic outbreak the board took a conservative approach to preserve capital in the face of prevailing uncertainty by adopting both offensive and defensive strategies which included the withdrawal of the declared dividend pay-out for 2019. 

Shareholders had more reason to smile, with a meeting agreeing on a new dividend policy requiring they be paid dividends equivalent to between 30 and 50 per cent of its after tax profits, beginning the current financial year ending December 31 2021.

Governance structure

During the AGM, the company’s Articles of Association was amended, reinforcing the group’s governance structure and signalling the growing significance of Equity Group Foundation as the social impact investment arm and custodian of the purpose of the Group.

“Today, the shareholders have demonstrated their confidence in the governance of the group, and further strengthened the structures to ensure the board is reinforced through diversified representation for effective oversight,” said Group Chair Isaac Macharia.

Consequently, shareholders with more than 12.5 per cent shareholding will be allowed to participate directly by having a seat, provided the total number of directors nominated for appointment does not exceed four.