KUALA LUMPUR (July 11): Shares in Eurospan Holdings Bhd (KL:EUROSP) climbed to a new all-time high since listing more than two decades ago, following the announcement of a special dividend.
On Thursday, Eurospan climbed 11% to an intraday high of RM2 before closing at RM1.94 — still up 14 sen or 7.78% — valuing the furniture maker controlled by the children of businessman Tan Sri Robert Tan Hua Choon at RM86.18 million. Trading volume totalled 586,100 shares, more than double the 200-day moving average.
No institutional analyst covers the stock.
The company has not declared any dividend in 14 years. At the current price, the special dividend of 20 sen per share would translate into a yield of nearly 11%.
Shares in Eurospan are usually little traded, with a free float of just 771,000 shares out of a total outstanding 44.4 million shares, with most of the shares held by company insiders.
In May, Datuk Seri Tan Han Chuan and his sister Tan Ching Ching, children of Hua Choon, triggered an unconditional mandatory general offer (MGO) for the company, after increasing their combined stakes in Eurospan to 71.8%.
Following the conclusion of the MGO on July 5, the siblings’ combined stakes further increased to 73.99%, equivalent to 32.87 million shares. With 32.87 million shares on hand, they stand to get RM6.57 million through the special dividend.
Eurospan managed to achieve a net profit of RM1.18 million for the first nine months ended Feb 29, 2024 (9MFY2024), thanks largely to property disposals. The company was in the red in FY2023.
On its part, the company expects a more challenging business environment for the remainder of FY2024. “The global market remains uncertain, with the ongoing Russia-Ukraine war and rising global inflation rates and interest rates,” Eurospan flagged.