Wednesday, August 29, 2007

More Interims

NMG's numbers are strong and bode well for the 2nd half when it should see an election uplift. Interestingly, its EAst African paper is doing very well too. Scangroup a fellow competitor for advertising had a solid first half. Scangroup tend to perform very strongly in the 2nd half as many companies will be advertising for the Xmas season and the coming year. Cash flow went into negative due to higher dividend payout and acquisition of RedSky. One thing I am not sure about is how well they are able to merge all these new companies they've been acquiring as well as grow regionally and into West Africa. The other concern is how well they will be able to keep the the account managers from RedSky.
Bamburi had a flat first half compare to last year. I am still not convinced they'll benefit (apart from scale) from their proposed merger with Portland. Construction industry will continue to be a growth industry, but they lack the agility and hunger for business that ARM have.
Express's PAT almost doubled in size and it looks as if their recovery is sustainable. The elephant in the room where they are concerned must be a rejuvenated Kenya Railway (RVR) which will be competing with them for the freight business from Mombasa to the rest of the country and to especially to UG. Jubilee had a fairly disappointing half. and i suspect that their reliance on investment income will continue to haunt them unless they can start focusing on the bread and butter insurance business. On the contrary, their rival PanAfrica had a strong half with all its insurance lines seeing strong growth, but had investment losses from associate wipe out all the gains. Perhaps they may benefit by hiving off this business?

3 comments:

J K said...

Express, I wonder what percentage of their total business is contributed by transporting cargo other than their own because that is the chunk that would be under threat from RVR.
Jubilee; their numbers last financial year were greatly boasted by the bull run experienced at the NSE last year. The contribution from that end will definitely be reduced this financial year so their bottom line might take some beating. While there is nothing wrong in them chasing easy money when opportunities avail themselves, they must not over rely on non core business to grow their profits; they must not neglect insurance business.

coldtusker said...

Like jk... I think Express would BENEFIT from a rejuvenated KR since they provide logistics solution not just long-distance road transport.

Don't forget, the goods from the trains have to be taken to the end-users.

Jubilee: The insurance business merely provides "cheap" float. See Warren Buffett & Berkshire Hathaway.

MainaT said...

JK/CT, please have a look at the pie on page 7 of Express's 2006 annual report. 58% of its PBT comes from transporting cargo from A->B.

Re Jubilee, yes but they then need to spread their investment portfolio and not just have in the NSE.