Kenya: Standard Group end year profits rise to Sh429m
The Standard Group’s overall financial performance for the 12- month ended December 31, last year reflects sustained business growth and an enhanced profitability trend.
Announcing the results in the company of the Group Chairman Robin Sewell, Deputy Chairman and Strategic Advisor Paul Melly attributed the improved performance to growth in advertisement and circulation revenue in addition to the company’s ability to adapt within an adverse operating business environment experienced during the first quarter of last year.
The Group realised an eight per cent growth in turnover, with the level of revenue rising to Sh2.8 billion compared to Sh2.6 billion during the year to December 31, 2007.
"The results show continued and sustained growth in terms of turnover and profitability of the business," said Melly. In this regard the Group returned Sh429 million in pre-tax profit, up from the previous year’s Sh413 million.
Operating costs rose three per cent to Sh1.3 billion mainly due to escalating fuel, electricity and distribution costs, depreciation of the shilling and additional staff costs prompted by capacity building and the need to maintain competitiveness.
Sewell said the company’s planned diversification programme into radio broadcasting would help protect the company’s earnings from erosion. "We are in very challenging times. The international situation is going to make it very difficult in future. But I’m very confident radio station will contribute to growth," said Sewell.
During the period under review, the Group’s net financing costs increased by 135 per cent due to the company’s sustained investment programme in productive assets. Earnings per Share (EPS), however, rose significantly by four per cent to Sh3.57 from Sh3.01
The directors did not recommend payment of final dividend, as a temporary measure to strengthen the Group’s financial base owing to massive investment in the ultra-modern Standard Centre along Mombasa Road and the envisaged challenging operating environment this year.
The board had declared an interim dividend for 2008 which was paid on August 15,last year. The Standard Group Centre will house the production and broadcast solutions as well as serving as the Group’s headquarters. It will be completed in May.
Melly took issue with the tumultuous international environment and in particular the recessionary impact due to the financial meltdown, saying it necessitates a cautionary optimistic view of the performance this year. "At the Standard Group we are prepared to ensure we remain on top of things," he told journalists at the company’s offices at the I&M Bank Tower in Nairobi, last week. He said the board and management would continue to monitor the unfolding global economic events, as the full impact on the domestic economy remains uncertain.