Unilever Consumer Care’s announcement of 60% stock dividend sent its stock prices soaring on the Dhaka Stock Exchange on Sunday.
The board of directors on Saturday made the disclosure to dilute the stock so the market price came down.
Instead, the stock jumped up to 26%, or Tk751, to Tk3,600.
The company’s share trading began on Sunday at an adjusted opening price of Tk2,849.
It peaked at Tk3,600 on the DSE during the day’s session before closing at Tk3,423.70.
There was no price movement restriction on the stock trading for the day following the corporate declaration.
The more-than-20% stock price rise of Unilever Consumer Care resulted in the broad index’s appreciation by 28 points.
Alongside stock dividend, shareholders will also receive 240% cash dividend for the year ended in December 2022.
Meanwhile, the company reported 38.44% profit growth for 2022 though its revenue declined marginally, compared to the previous year.
The company’s earnings per share (EPS) stood at Tk60.64 for 2022, up from Tk43.80 for the previous year.
The main product of Unilever Consumer Care is Horlicks.
It also markets Boost, Maltova, and GlucoMax.
The stock dividend recommended by the company will boost its paid-up capital.
Now, its paid-up capital is Tk12.05 crore, and there is a regulatory instruction to expand the paid-up capital of small companies to Tk30 crore.
In the disclosure, the company said the stock dividend was meant to ensure utilization of the retained amount as capital for future BMRE (Balancing, Modernization, Rehabilitation and Expansion).
The bonus shares will be given out of the accumulated profit or retained earnings in line with the regulatory requirement.
Unilever Consumer Care saw a significant increase in costs of raw and packaging materials impacting its business performance.
Its operating cash flow declined in 2022 compared to the previous year, mainly for the price hike of the raw and packaging materials.
The rise in foreign exchange rate was partly offset by efficiency in spending related to trading and overhead expenses.
The net operating cash flow per share was Tk30.11 for 2022, down from Tk51.65 for the same period of the previous year.
The net asset value per share went higher due to higher profitability.
The NAV per share was Tk139.60 for 2022, increased from Tk122.88 a year ago.
