GSK Consumer Nigeria Office

GlaxoSmithKline Consumer Nigeria Plc recently released its results for the 12 months ended December 2017. The company’s profit after tax fell sharply from ₦2.3 billion in 2016 to ₦486 million in 2017, largely due to elevated costs of sales.

GSK, however, opted to pay a special dividend of ₦7.10 per share and an ordinary dividend of ₦0.40 per share. The total cash value of the special dividend is a whopping N8.4 billion and will be paid from the portion of its retained earnings that was earned from the sale of its drinks business to Suntory in 2016.

GSK Sold its drinks division (Ribena and Lucozade) to Japanese firm Suntory Ltd.

The regular dividend will be paid from its pioneer earnings balance of ₦915.5 million.

What is a special dividend?

A Special dividend is one that is issued by a company out of profits it made from Extra-ordinary income. Extra-Ordinary income refers to an income that a business makes upon unusual circumstances.

Dividends are usually paid from the profits a company has made at the end of its financial year. The company may opt to pay all or part of its profits. These profits accumulated over several years are known as retained earnings.

GSK’s Special Dividends

GSK made ₦20.9 billion in 2016 from the sale of its drink business to Suntory Beverage and Food Nigeria Limited. The amount being cash was kept in the bank by the company until it has now decided to distribute it to its shareholders.

A common mistake might be to believe the ₦3.9 billion profit after tax from the proceeds of the sale of the drinks business, is what they should actually distribute as dividends. However, that is not the case as the company can indeed, share the entire cash proceeds considering that the cost of the property and plant and equipment of the drinks business had been paid for years ago.

It paid a special dividend of ₦0.60 per share in 2016 amounting to ₦717 million.

Deal book 300 x 250


The 2017 special dividend from the proceeds amounts to ₦8.49 billion, while ordinary dividend equates to ₦478 million. A total of ₦8.96 billion will thus be paid to shareholders for as dividends for the 2017 financial year.

Pioneer earnings

A company qualifies for pioneer status when it either embarks on a new project or expands an existing one. This qualifies the company for a tax holiday for a maximum period of 5 years. Dividends declared during this period, are not subject to tax.

Who gets what and how much

Setfirst Ltd and SmithKline Beecham Ltd own 46% of GSK Nigeria. Based on this they will receive ₦3.9 billion only.

53.6% of the shares of the company are owned by Nigerian Shareholders.


GSK shares closed at ₦28.05 in today’s trading session, up 10%.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via


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