Zenith Bank:Shareholders reap 600% capital gain
Sunday, 09 December 2007
WITH Zenith Bank PLC returning to the capital market in a hybrid offer to raise N130 billion, it has been revealed that investors who participated in the bank’s Initial Public Offering (IPO) in 2004 have enjoyed capital gains of about 600 per cent.
Zenith Bank is back in the market in an offer for subscription of 1,763,000,000 ordinary shares of 50k each at N38.90k and a rights issue of 1,654,557,911 units at N36.90k. The offer which opened on
Thursday, December 6, 2007 will run till January 17, 2008.
Before trading was frozen, as required by law, Zenith stock traded for N46.09, indicating that the shares on offer are coming at a discount of at least N10 per share.
Since its IPO in 2004, the Zenith stock has enjoyed positive progression from N10.90 to peak at N66.14 per share at the end of trading at the NSE on June 30, 2007, representing a total gain of over N55.24 per share.
Apart from the capital appreciation, investors have also reaped from the bank’s generous dividend payout as the bank made good on the promise made when it went public in 2004 and during the public offer of 2006 by paying out about N20 billion in just three years.
A detailed analysis of the bank’s Annual Report for the past three financial years showed that the bank surpassed its dividend projections of N5.1 billion for 2006 by actually paying out N6.6 billion (or N1.10 per share), representing a 29.6 per cent increase. In a similar fashion, the bank surpassed its projections of N7.6 billion for 2007 by paying out N9.2 billion (or 100 kobo per share), representing a 21 per cent increase.
The bank paid a dividend of N6.6 billion at the end of its 2004/2005 financial year up from the 4.2 billion (or 70 kobo per share) paid out the previous year.
Every year, since its IPO, the bank has scored high on credibility among investors for usually surpassing the dividend projections made when it went public.
Zenith Bank has enjoyed a successful year, with its consistently good financial performance producing high patronage on the floor of the Nigerian Stock Exchange (NSE), leading to the bank being named the “Quoted Company of the Year” by the Council of the Nigerian Stock Exchange.
For investors, this is another opportunity to buy into a stock that is structured for long-term value and a bank that has instituted its own unique business model that is designed to surpass its superior performance year after year
This article was taken from vanguardngr.com the online version of the Nigerian paper, Vanguard.