Berger recommends 295% cash dividend

Leading paint company Berger Paints Bangladesh Ltd has recommended a 295 percent cash dividend for its shareholders in the 2019-20 financial year that ended on March 31.

Berger will hold its annual general meeting on July 28 where the final approval of the dividend will be given. It will also approve the audited financial report and other decisions at the meeting.

The board of the company also decided to invest Tk7.60 crore in ordinary shares of Berger Fosroc Ltd to fund the establishment of a factory.

Berger Fosroc Limited, a joint venture between Berger and Fosroc International Ltd, manufactures and sells chemicals used in construction. Berger has a 50 percent share in the venture.

The company thrived over the years despite a dull market caused by a slowdown in the country's housing and infrastructure sectors.  

Berger's sales have increased on an average of 11 percent annually over the last 6 years, and it maintained the pace during the 2019-20 financial year.

During this period, the company's earnings per share grew by 18 percent to Tk52.22, riding on declining prices of raw materials in the international market.

Income from equity investments in two joint venture companies has also contributed to Berger's profit growth.

"Profit growth jumped as we had to spend less on production," said Rupali Chowdhury, managing director of Berger Paints Bangladesh Ltd. 

However, she said the housing and infrastructure sectors are experiencing a slowdown for the last two years and its impact has spread to the paint market. 

"That is why our growth has not met the expectations."

In the fourth quarter of the 2019-20 financial year, the earnings per share of the company decreased by 2 percent due to the lack of sales amid the Covid-19 pandemic.

Berger paid its shareholders a 250 percent cash dividend in the 2018-19 financial year. In the previous financial year, it paid 200 percent in cash and 100 percent in stock dividends.

The company was listed on the stock market in 2006, with a paid-up capital of Tk46.37 crore.

Berger shares closed at Tk1,308.60 on Thursday at the Dhaka Stock Exchange (DSE).    

Share prices surged to their highest at Tk1,614.80, while the lowest was Tk1,208 in the last 12 months.

The J&N Investments (Asia) Ltd holds 95 percent share of Berger while institutional, foreign and general investors respectively hold 2.45 percent, 1.14 percent and 1.41 percent.   

Berger began its journey back in 1970 and is thus one of the oldest paint brands in the country.

Company officials said plastic emulsion, distemper, weatherproof exterior coating and synthetic enamel are the key products that helped them hold onto the majority of the market share.

The company diversified its business and expanded, estimating growth in infrastructure development in Bangladesh.

Jenson and Nicholson (Bangladesh) Limited, a subsidiary of Berger, produces tin containers and prints tin sheets.