Category Archives: Standard Group

KCB 1923 AGM: Optimism amid political disturbances

In May 1923, the East African Standard published a report from a bank AGM.

Mr. Robert Williamson, the deputy chairman of the National Bank of India addressing shareholders at the annual meeting yesterday, made a brief reference to the position in East Africa today and in the course of his remarks, suggested considerable improvement in the prospects for both trade and agriculture.

Mr. Williamson said the export trade of the country was more active and its products such as maize, coffee, and hides had found a ready market. The Uganda cotton crop, although it would not realize the original estimate of about 100,000 bales, would be fairly large and should assist in the off-take of imported goods through the buying power produced from its sale.

“The repeal of the Kenya income tax and revision of customs duty should also improve matters. There are,” he added, “certain political disturbances locally almost inseparable from the growth of a young country with a mixed population such as Kenya has, which we all trust are capable of adjustment. The outlook in this direction is promising as deputations from the districts are coming to London to interview the Secretary of State for the Colonies.”

A dividend for the six months ended December 31st, last at the rate of 20% per annum was agreed to.

More:

The National Bank of India was the top bank in colonial Kenya. It is the oldest bank in the country and is today known as KCB

Bank Clerk in the Kenya Colony

In April 1923, the East African Standard, ran an anonymous blog-like column by a bank clerk in the Kenya Colony. He narrates how he wakes up slowly, is brought tea by his servant Juma (which means Friday), then is brought his bath, of which there are two types, before he goes to work.

Excerpts:

“… and then on to the business of the day. Monotonous life? don’t you believe it! I doubt whether a bank clerk’s life is ever really monotonous as some make it.

In Kenya, it certainly is not as our customers are so varied. One minute, a newly-retired colonel of the Indian army, moustache and all. Next, a retired lieutenant commander from the Navy who perhaps goes one further and sports a beaver. Then one of the boys – Navy, Army or Air force for the duration, now farming. Then a lady farmer, charming, even wearing breeches. Government officials and visitors.

In they come, day after day. Monotonous? Never. All as different as chalk from cheese except in two respects; they are all jolly good sorts and they all want overdrafts.

It’s all very well to be light-hearted about it but I am afraid that we often miss the gleam of bitter sadness which lies behind it all. Kenya is a young colony and fortunes cannot be made in a day. There are as many who failed to grasp this. They come out here with family and little else. The wife is still here, the family perhaps has increased but an ominous overdraft and a mortgage form have taken the place of the little ones.”

The day ends with sundowner drinks and an early night, to be repeated all over again.

E.A. Power & Lighting, 1929

The financial results of the East Africa Power & Lighting Company were published in London in July 1930 and reported by the East African Standard in Nairobi later that month.

Excerpts:

  • Revenue from sales for the year after generation costs was £86,891. Other revenue was £1,334 from the meter department.
  • Repairs, maintenance and distribution cost £11,964, salaries were £11,649, while directors fees and head offices expenses were £5,265, leaving a balance on the revenue account of £65,044.
  • The authorized share capital of the company was £700,000 with £570,000 issued, of which £270,000 are (7%) preference shareholders. Capital expenditure of the company was £432,462, with investments of £50,000.
  • The profit carried forward of Shgs 1,334,797 (equivalent to £66,739/17) was allocated as a dividend of Shgs 378,000 to the preference shareholders, depreciation was Shgs 220,000, to the general reserve was Shgs 60,000, re-issue of capital of Shgs 120,000 and a reduction of capital expenditure of Shgs 45,857.
  • This left a balance of Shgs 330,940 out of which a final dividend of 4% (making a total of 7% for the year) would be paid, and the staff provident fund would get Shgs 60,000, while Shgs 30,490 would be carried forward.
  • The company was negotiating with the Government for permission to develop further hydro-electric resources. The Financial Times described the discussions as “progressive” and that a favourable decision would soon be reached to hasten the execution of the work. They were also considering an additional plant in the Mombasa area to meet the increasing demand.
  • The number of consumers in Nairobi in 1929 was 3,084, an increase from 2,292 in 1927, while Mombasa had 1,424 consumers, an increase from 994 in 1927.
  • Owing to his absence from the Colony, Mr. J. Cumming, who joined the board in 1928, resigned his position as a director. The Hon. D. Finch Hatton was re-elected, while Mr. R. G. Vernon of Nairobi was appointed to fill a temporary vacancy on the board.

More:

  • From KPLC: In 1922, two utilities in Nairobi and Mombasa merged under a new company incorporated as the East African Power and Lighting Company (EAP&L).
  • See a more detailed story on the history of the company and a recent one on investing.

Standard Group 2008 AGM

The 90th annual general meeting of The Standard Newspapers Group was held at the Panari Hotel on July 16.

The number two media house in Kenya is in the middle of a three-year turnaround plan that had among others, seen it recapitalized, appoint new directors and executives, move to the main investment board of the NSE, restructure its balance sheet (move from a reserves deficit to surplus), make capital investments amounting to Kshs. 1.2 billion (new printing press, new headquarters building next to the Panari, among others), and resume paying dividends.

Circulation is up 40% in a year (at the expense of competitors’), the deputy chairman said as he laid out plans, but without divulging details at their ‘main competitor’ (Nation) likely would learn of them through some mutual shareholders.

Format was Questions, then Answers from the directors, mainly Chairman Robin Sewel, Deputy Chairman Paul Melly and MD Pau Wanyagah.

Right off the Chairman apologized for some omissions from the annual reports and agenda that shareholders had been sent – which were a list of top shareholders and an agenda item to approve payment of dividends to (8%) preference shareholders Shareholder questions were the order of the day, and some of the subjects covered included;

Capital investments:

– The 1.2 billion not reflected in the account; these are multi-year investments spread out over several years
– Is the new plant and headquarters on land owned by the mzee? The land is owned by the standard group.
– Is the printing press new – as this is the third press, and others may have been used and did not last long?

Dividends:
– When will the dividend declared in April be paid? It will be paid August 15
– Why the delay in dividend declared and can it be paid with interest? The law allows a certain period for companies to pay dividends, and no interest will be paid
– Why an interim, but no final dividend? The company want to resume a consistent dividend-paying practice, and not over-do it in one year and not be able to in subsequent years.

Fund-raising:
– Company has raised 1.2 billion – from where? From internally generated cash (362m in ‘07) and borrowings.
– Why loans from shareholders – trade world and miller? These are at market rates.
– Why not raise funds from shareholders – so that the gains will be from dividends not interest payments? Tax gains from borrowing.

Content:
– Why does KTN not appear to support/relate to standard and vice versa? Each has to differentiate their own content and not cannibalize each other
– Plans to promote local content and programming which are very popular in rural areas and which one competitor (citizen?) is doing very well? Plans are underway and they recognize that market
– Plans to go to into radio? They have been trying for some time, but CCK says no signals are available, so they are looking at other entry means (purchase existing?)

Online strategy:

– The website only updated once a day; that will change, as they will soon switch to 24-hour site updates
– Because of infrequent updates, website not well known or searched for: plans are underway to change this new website?

Accounts presentation:
– For how long will KTN be in receivership? The KTN company is dormant and all their financials are processed through Baraza.
– How long will preference shares be on the books? The amount is so small they have not thought it necessary t go through the expense of wiping them away, but could easily pay them off.
– On the previous minutes (2007 meeting) one shareholder asked if two issues from last year were resolved, namely: the adoption of a company ESOP and buyout of remaining minority shareholders in Baraza Limited – but the chairman said they had still not been finalized.

The company will in future include:
– Scan signatures of auditors and directors.
– Highlight CSR activities undertaken.
– Complete CV’s of board members.
– Directions to meeting venue and contacts.
– Information about the company registrar.

HR:
– Did some directors resign or were they sacked? Their contracts ended and the board felt it was prudent to replace them.
– How will they ensure capacity to run new press is retained? Staff are being trained in Germany and their terms will be reviewed to retain them in the company.

Others:
– Plans to get on GTV? Will switch from analog to digital broadcasting soon.
– Plans to go regional (East Africa)? Plans are underway, but no details yet.
– Why are magazines cheaper to order individually than it  using Publisher Distribution Service (PDS) who should enjoy economies of scale? That is magazine industry norm where individual subscribers get better terms if they make a long term commitment.

Goodies: tote bag, with two shirts (polo and tee), and a newspaper of the day. A buffet lunch, which I thought, would be a messy affair turned out to be ok as only about 200 of the company’s 3,000 shareholders were there to pile their plates at the Panari Restaurant.

full plates, but owners already gone back to re-fill