Mpico plc shareholders have expressed frustration over what they describe as poor returns despite the property company recording a 72 percent increase in profit to K12.18 billion in 2024.
During a stakeholder engagement meeting on Monday, investors criticised the company’s K0.43 dividend declaration and the lack of capital gains from their investments.
Shareholder Lovemore Tinto suggested the company issue bonus shares to compensate for the disappointing returns.
General Secretary of the Minority Shareholders Association of Listed Companies, Frank Harawa, said the dividend was too small given the company’s profitability.
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He questioned how long shareholders would have to wait for significant returns after investing in the company for extended periods.
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The dividend they have declared is too small, K0.43. This is why we are saying they need to pull up their socks and do something, and we are now putting the blame on management.
“Shareholders have invested their money in this company for a long period of time and we are really concerned; how long is this going to take until we get significant returns?” Harawa said.
He suggested the company diversify into the hospitality sector and restructure existing assets such as Gateway Mall by creating smaller retail units.
Acting Managing Director of Old Mutual Investment Group and Mpico board director, Mphatso Kasalika, defended the company’s 2024 performance despite economic challenges.
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He highlighted the company’s profit growth from K7 billion to K12 billion as a strong performance that should excite shareholders.
Kasalika acknowledged challenges including high inflation, increased operating costs and foreign exchange scarcity, which affected property maintenance due to reliance on imported materials.
“Performance was good, the rental income growth was good as well—17 percent year on year. The company trades at a significant discount to book value, indicating unlocked value potential.
“We believe there are opportunities. We see some sectors that have been prioritised by authorities and government, be it hospitality, mining or manufacturing,” Kasalika said.
He expressed confidence that Mpico is well positioned to capitalise on growth opportunities in these priority sectors.
According to the company’s annual report, revenue grew by 25 percent in 2024, driven by rental income, which increased by 17 percent to K8.06 billion from K6.88 billion in 2023.
Fair value gains rose by 35 percent to K12.07 billion from K8.93 billion in the previous year, while operating expenditure increased marginally by 5 percent to K6.74 billion.
The profit surge was attributed to improved rental income and property fair value gains, with tax charges falling to K2.71 billion from K3.87 billion in 2023.
Government rental arrears decreased slightly to K3.4 billion from K3.5 billion in 2023.
