First Holdco Plc has announced a new dividend policy that will see the company distribute 60% of its annual profit to shareholders, effective from the current fiscal year. The decision, approved by the board of directors, makes First Holdco one of the highest dividend-paying holding companies on the Nigerian Exchange (NGX).
The policy is part of a broader strategy to enhance shareholder value and attract long-term investors. According to a statement from the company, the move reflects its strong financial performance and commitment to rewarding shareholders.
Dividend Policy Details and Financial Impact
Based on the company’s most recent annual profit of N83 billion, the 60% payout would translate to approximately N50 billion in dividends distributed to shareholders. This represents a significant increase over previous payout ratios, which averaged around 35% over the last three years.
“This new policy underscores our confidence in the company’s earnings trajectory and our dedication to providing consistent returns to our investors,” said First Holdco’s CEO, Mr. Adebayo Ogunlesi, in a press release. “We believe this will strengthen investor confidence and support the growth of our share price.”
Market Reaction and Analyst Perspectives
Market analysts have reacted positively to the announcement. Investment firm Meristem Securities noted that the new policy could boost First Holdco’s stock valuation by 10-15% in the short term. They added that the move may pressure other holding companies to review their dividend policies.
First Holdco’s share price rose by 3.5% on the NGX following the announcement, reflecting investor optimism. The company, which has interests in energy, real estate, and financial services, reported a 22% increase in annual profit last year, driven by strong performance from its subsidiaries.
Strategic Implications and Future Outlook
The increased payout ratio signals a shift toward prioritizing shareholder returns over reinvestment, which may impact the company’s expansion plans. However, First Holdco’s management assured stakeholders that capital expenditure for growth projects would remain adequately funded through operational cash flows and debt financing.
The policy is effective immediately for the current fiscal year, and the first dividend under the new regime is expected to be declared in the second quarter of 2026. Shareholders have lauded the move, with many anticipating higher total returns.
