Scangroup of Kenya Rises to 11-Month High on Profit Speculation
Scangroup shares advanced 2.9 percent to 53.50 shillings, the highest level since May 25 last year, as of 12:49 p.m. in Nairobi, gaining for a second day.
“Buoyed by strong full-year 2011 earnings expectations ahead of the company’s results announcement on 18th April 2012, Scangroup may see increased demand from both local and foreign investors,” Kestrel Capital East Africa Ltd. said today in an e-mailed note to clients.
Scangroup was rated hold in new coverage by Dyer & Blair Investment Bank on April 3. The Nairobi-based bank set a 12- month price target of 61.4 shillings.
“The main reason supporting the share price is expectations of profit growth,” John Kamunya, an analyst at Dyer and Blair, said in a phone interview today. “I expect between 40 percent to 50 percent growth in profit after tax.”
The company made several acquisitions last year and sales are expected to jump after Scangroup clients performed well and increased their expenditure, Kamunya said.
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