NMG shareholders approve 10pc buyback, investors set to cash in
Nation Media Group Board of Directors Deputy Chairman Dennis Aluanga, Chairman Wilfred Kiboro and CEO Stephen Gitagama go through the company’s annual financial report during the 58th Annual General Meeting at Nation Centre in Nairobi on June 25, 2021.
What you need to know:
- The media house will start buying the shares from Monday at the set buyback price of Sh25 a piece following shareholders nod at the Annual General Meeting held Friday.
Shareholders of Nation Media Group (NMG has approved the company’s decision to acquire up to 10 per cent of its issued shares in a stock buyback plan that offers investors a chance to cash in on their investments.
The media house will start buying the shares from Monday at the set buyback price of Sh25 a piece following shareholders nod at the Annual General Meeting held Friday.
This makes NMG the first company at the Nairobi Securities Exchange (NSE) to launch a share buyback following changes to the company law in 2015 that allowed firms to acquire their own shares.
NMG will on Monday ring the bell at the NSE to officially open the share buyback program that will allow the company to acquire a maximum of 20,739,652 shares.
“The buyback will close on the earlier of the company buying up to 10 per cent of the total issued shares or at 3pm Friday, September 24, 2021,” said Wilfred Kiboro, NMG chairman.
“The share buyback seeks to address undervaluation and also to facilitate those shareholders who seek to liquidate part or all their shares. Any ordinary share acquired by the company will be held as treasury shares.”
Strong recovery
A share buyback is one of the ways for a company to return funds to shareholders, effectively reducing the number of issued shares.
The media house recorded a net profit of Sh135.5 million for the year ended December 2020 following a strong recovery in the second of the year that wiped out the loss of Sh352.7 million announced at half year.
The company had Sh2.9 billion in cash and cash equivalents at close of the year.
Kenya’s economic performance in 2020 was hit by effects of the Covid-19 pandemic and restrictions that were put in place by respective governments in the region to contain its spread.
NMG says the curbs on movement and stay-at-home push affected distribution of newspapers, adding that a drop in hard copy sales was partially mitigated by growth in e-paper subscriptions.
Launch and revamp
East Africa’s largest media company has rolled out a two-pronged approach to sustain growth that includes renewed digital presence with the launch of Nation.Africa and a revamp of its print business with the recent facelift of the Daily Nation.
NMG chief executive Stephen Gitagama said the hybrid business model will accelerate the upgrade of the firm into a modern digital content providers and enable the company meet its short and long term objectives.
“We intend to focus on building on the digital gains from 2020 to get high quality diversified content into the hands of the consumer through the use of data insights, study of the target audience patterns and the value we add,” said Mr Gitagama.
The board expects improved performance in 2021 on the back of easing of pandemic related restrictions and the gradual rebound of economic activities, which will trigger recovery of businesses.
