Hisanet Africa Blog
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Safaricom IPO: General Schedule
Posted: March 20, 2008, 7:59 pm by admin
With the confirmation of the Safaricom IPO, these are the facts
you need to have as an investor;IPO Opening Date: March 28th 2008
IPO Closing Date: April 23rd 2008
Price per Share: Kshs 5.00
Shares on Offer: 10 Billion
Target Funds: Kshs 50 Billion
Par Value: 50 cents
Minimum Shares for local individuals: 2000 Shares.
Minimum Shares for Corporates: 100,000 Shares.Market Value of Company at IPO: Kshs 200 Billion
Book Value: Kshs 5,813 representing 14% discount
Market Value at book value: Kshs232.6 Billion
Trading date in Secondary Market: June 9th 2008.Due to the expected rise in demand for the Shilling, strengthening of the
shilling against other currencies is highly anticipated during this period.
It is therefore advisable for investors in the Diaspora to consider sending
in funds sooner before further strengthening of the local currency.According to the transaction advisers, the applications for the sale will be online as well as manual; make your choice. The online application is intended to make the whole process more transparent as well as reduce the time spent on processing the applications.
For online application, investors will be required to log in to www.kenyaipos.co.ke. However, payments will be made to the broker.
Allocation of the shares is expected to be on a pro-rata basis, meaning that it will be a percentage proportional to the number of shares you apply for.
Some of the key questions that the offer is raising now are: Given that the number of shares on offer this time round is a massive 10million shares, will investors get a substantial amount of the shares they applied for or is it going to be similar to recent IPO’s where over subscription has led to minimal allocations?
Another question the IPO is raising is how high the share will go on the first day of trading on 9th of June. And how will floating of these shares affect other counters at the bourse?
We recommend a strong buy on this counter
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Safaricom IPO: High Anticipation, Market Effect
Posted: March 14, 2008, 11:56 am by admin
Anticipation of the Safaricom IPO some time at the end of this month has already caused ripples at the bourse with most investors seeking to sell off their shares.
The market over the week in review has witnessed a substantial amount of supply of shares, a trend which is expected to prevail in the days culminating to the IPO. Since the political settlement reached two weeks ago, the market has experienced a lot of positive energy, a trend that was expected to spill over into this week.
Investors who had taken positions at the beginning of the year when prices were very low have managed to take profits after the price surge that was witnessed right after the signing of the power sharing deal. Take for instance the week right after the announcement, the NSE 20 Share index gained a total of 282 points (approx 5%) to settle at 5,354.68 points against the 5072.41 recorded in the previous week.
However, rumors of the IPO have led investors to sell of their shares, causing most of the counters to dip. The tendency of investors selling to exit their positions ahead of an IPO was witnessed during the Kengen IPO in 2006.
A preliminary valuation of the company, which is Kenya’s most profitable; put the net worth of the company at Kshs221billion. The pricing of the Kshs55billion sale is expected to be discussed after the actual date is known.
The unconfirmed reports on the IPO pose a few questions for the investor. For instance, what will the impact of the IPO in the market? How do we expect the secondary market to react once the shares start trading? And most importantly, how far up do we see the share moving once it starts trading?
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EABL 6 months results upto 31st Dec 07 (Unaudited)
Posted: March 5, 2008, 9:22 am by admin
Business Overview
We have delivered a strong start to this financial year posting a growth of 26% on net turnover and 22% PBT growth in an environment where economic growth was buoyant yet inflationary pressure were high. We have shown strong growth in volume, turnover and profit.
We continue to benefit from the additional investments in marketing across the region and this is set to continue in the second half with the launch of Tusker Project Fame 2 among other activities. We have had strong consumer pull in Tanzania and Kenya, which posted 13% and 22% growth respectively, while Uganda was flat. Profitability across the group reflected volumes growth with Kenya up 21%, Uganda flat while Tanzania share of profit was up 20%.
Our first half results were not materially affected by the post-election crisis in Kenya as it only impacted the final four days of December 2007. Although in January and February 2008 our volumes were ahead of last year we experienced a slow down in our growth rate. With the political reconciliation arrangements having been entered into, beer and spirits volumes in the region should pick up again for the remaining part of the year.
The highlights of the group results are as follows:
§ Net revenue of KShs 16.1bn (+27%) compared to KShs 12.7bn last year
§ Profit before tax of KShs 6.5bn (+22%) compared to KShs 5.3bn last year
§ Profit after tax of KShs 4.7bn (+27% compared to KShs 3.7bn last year
§ Free cash flow reduced by KShs 0.8bn during H1 to stand at KShs 7.2bn
Overall the board considers this as a strong set of results for the Group.
Dividend
The directors are pleased to announce an interim dividend of KShs 2.40 per share, which compared to the KShs 2.15 (KShs 1.79 restated) per share paid last year, represents a 34% increase on a restated basis. The total dividend payout is KShs 1.9bn compared to last year at KShs 1.4bn an increase of 34%.
The register of members will be closed from 28th March 2008 to 31st March 2008, both days inclusive. The interim dividend will be paid on or about 14th April 2008 to shareholders on the register as at 28th March 2008.
The Group:
Kenya Breweries Ltd
Uganda Breweries Ltd
East Africa Maltings Ltd
Central Glass Industries
UDV (Kenya) Ltd
International Distillers Uganda Ltd
Consolidated Profit and Loss Account
Six Months to
31-Dec-07
(KShs ‘M)
Six Months to
31-Dec-06
(KShs ‘M)
Changes %
Net Revenue
16,089
12,654
27%
Cost of Sales
(96,153)
(4,536)
36%
Gross Profit
9,936
8,117
22%
Other Operating Income (Expense)
85
107
-20%
Selling and distribution costs
(1,110)
(918)
21%
Administrative Expenses
(3,235)
(2,556)
27%
Profit From Operations
5,675
4,750
19%
Net Finance Income
323
171
89%
Income from Associate
455
379
20%
Profit Before Taxation
6,453
5,300
22%
Profit After Taxation
4,732
3,713
27%
Minority Interest
(864)
(701)
23%
Net Profit
3,869
3,013
28%
Basic EPS (Dec 06 restated)
4.89
3.81
28%
Interim DPS paid (Dec 06 restated)
2.40
1.79
34%
Beer Volumes up 19% (440K HLS)
Spirits Volumes Up 22% (150K 9L Cases)
Net Turnover Up 27% (3.4bn KSh)
Marketing Spend Up 21% (200m KSh)
Profit Before Tax Up 22% (1.2bn Ksh)
Profit After tax Up 27% (1bn KSh)
Earnings Per Share Up 28%
Interim Dividend Up 34%
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Uchumi out of the woods with 63M in profit
Posted: March 2, 2008, 1:24 pm by admin
On 31st May 2006 the Board and Management of Uchumi Supermarkets Ltd. Passed a resolution to cease trading and the company operations were shut down, a closure that lasted from June 1, to July 14, 2006. Following the decision, the company’s secured debenture holders were compelled to appoint Receiver Managers on June 2, 2006. Subsequently, stakeholders that included GOK, the debenture-holders, unsecured creditors and a few Uchumi shareholders spearheaded a Framework Agreement (FA) governing Uchumi revival route.
On July 14, 2006 the debenture holders under the FA appointed a Specialized Receiver Manager (SRM) who commenced reopening Uchumi retail branches for operations on July 15, 2006 with the last branch of the fourteen reopened being done on Feb 9, 2007. The SRM in consultation with an Advisory Committee crafted The Uchumi Rescue Plan (URP) that is at an advanced stage of implementation, and the successful turnaround is pinned on the URP among others.
The 2005/6 performance highlights relative to the previous year were the declining sales revenue (by 31.7%), downswing in trading margins and customer numbers, and increased debt carrying capacity resulting in higher financing costs and a recorded annual loss of Shs 751 million, culmination in to a closure of operation by end May 2006.
The operating REVIVAL year 2006/7 marked an upswing in sales revenue, and trading margins by 27% and 22.8% respectively compared to the previous year. These were despite operating fewer branches for fewer months in the year. The positive results were attributed to the implementation of the URP that included the successful re-launch of the brand and refocused and redefined core purpose and business objective. Further, in line with the FA, the business substantially met its bargain in corporate obligations to the pre-receivership creditors and current suppliers. The operating costs included one-off exit costs on facilities that were regarded as unviable to operate. The resultant performance was reduced loss of Shs 256 million from Shs 751 million in previous year.
The six months from July to December 2007 of the current operating year is a remarkable period as effects of the URP are realized. The turnaround from loss to profitability of Shs 63 million was recorded with steady decrease in loss from Sh 4.17 and Shs 1.43 per share for 2006 and 2007 respectively to profit of Sh 0.35 per share in the first six months in 2007/8. The balance sheet in terms of increased total assets and decreased current liability in the period strengthened in line with the improvement in profitability.
The positive outlook is pegged on completion of implementation of the blue print URPO including invitation of strategic equity partners, and the planned business growth in all strategic adjacencies. These will be coupled with roadmap to lifting of receivership and application for readmission to NSE, all expected in the middle of 2008.
UCHUMI SUPERMARKETS LTD (IN RECEIVERSHIP)
CONSOLIDATED INCOME STATEMENT
UNAUDITED
JULY-DEC 07
AUDITED
JUNE 2007
AUDITED
JUNE 2006
KShs ‘000
KShs ‘000
KShs ‘000
Net Sales
3,422,376
4,503,241
3,551,833
Cost of Sales
(2,790,350)
(3,694,845)
(2,907,847)
Gross Profit
632,027
808,396
643,986
Other Income
69,921
155,298
141,500
EXPENSES
Admin & Establish
(494,791)
(1,019,791)
(1,314,510)
Selling & Distrib
(48,079)
(48,339)
(54,202)
(524,871)
(1,068,130)
(1,368,712)
Profit (Loss) – Ops
159,077
(104,436)
(583,226)
Finance Costs
(96,003)
(152,124)
(167,854)
Profit (Loss) before tax
63,075
(255,560)
(751,080)
Taxation
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Profit (Loss) after tax
63,075
(255,560)
(751,080)
Profit (Loss) per share
0.35
(1.43)
(4.17)
CONSOLIDATED BALANCE SHEET
Assets
Non-current assets
763,199
820,220
1,004,007
Current Assets
937,327
763,537
487,117
Total Assets
1,700,526
1,583,757
1,491,124
Shareholder’s Equity & Liabilities
Capital and Reserves
(1,007,937)
(1,071,012)
(813,072)
Non current Liabilities
Terms Loans
1,597,950
1,597,950
802,472
Current Liabilities
1,110,514
1,056,819
1,501,724
Total S/Holders Fund & Liab
1,700,526
1,583,757
1,491,124
Blah blah blah
Fish cakes
Alas a fish cake.
Yet more fish cakes
Guess what ... yeah ... fish cakes.
The end of the fish cakes
