By Constant MundaLonghorn Publishers stock hit a record high on Friday at the NSE after it declared a final dividend of Sh1.20, bringing the total payout to Sh2 per share.
It said the 150 per cent increase, compared to Sh0.80 total dividend per share last year, was helped by "accumulation of reserves supported by availability of cash flow".
Longhorn further announced it will be issuing three bonus shares for every two held, subject to shareholder and regulatory approvals.
The bonus shares will however be ineligible for the final dividend for the year, it said when releasing financial statements for the year ended June 30.
The announcement sparked off appetite for the stock, pushing it to an all-time high of Sh24 a piece at the close of trade - a 59.47 per cent increase over Thursday's closing price of Sh15.05.
Managing director Musyoki Muli told an investor briefing on Friday that he expected Longhorn's free float to increase going forward. This follows the expiry in July of the two-year lock-in period imposed by regulator the Capital Markets Authority on anchor shareholders when the company listed 58.5 million ordinary shares by way of introduction in 2012. The firm's shares were previously trading over the counter.
Longhorn's full-year net profit was flat, growing by a slim 1.1 per cent to Sh94.9 million, which it attributed to increased distribution costs in export markets.
Focus on regional markets was responsible for a 159.4 per cent jump in distribution costs to Sh209.6 million, the firm said, after the purchasing power in Kenya was dented by the enforcement of 16 per cent Value Added Tax in September 2013.
Muli said the booking of the costs was as a result of a "deliberate one-off" consolidation strategy in its five export markets led by Tanzania where it acquired intellectual property rights from Apex Publications, and Rwanda where it plans to establish a subsidiary.
It said all school book titles it submitted on entry into Zambia in the review period through a government tender were approved. The publisher is developing instructional materials for the new curriculum in Malawi.
Longhorn further plans to acquire permanent office space in Kampala for its operations in Uganda while in South Sudan it has a running donor-funded supply contract.
"With the number of books we have put in those markets, we expect the costs to be significantly low this year while sales go up," Muli said.
The export markets contributed Sh457.9 million to Longhorn's record Sh1.4 billion revenues from sales - a 35.9 per cent growth over the previous year.
Muli said the price of books in Kenya went up by between 25 per cent and 32 per cent following the enforcement of the VAT levy when the impact of 11-14 per cent on input costs were factored in.
"Kenya is the only country in Africa that charges VAT on books," he said.
It has digitised over 250 book titles "to satiate the demand for quality products", in addition to acquiring the Malkiat Singh book series last October.