Olympia Capital held it’s 2016 AGM in in Nairobi on Monday. It was a brief meeting at the 680 Hotel during which the board promised they had turned the company round and expected to pay a dividend next year and be on time with their financial reports. They will announce their half year results, in two weeks, and the CEO said their (unaudited) business in Botswana was their best investment, while South Africa was a disaster where they had lost a lot of money.
We don’t want cents
He said, 17 years after they made the deal, 50% of the company business is now from outside Kenya, and even though the Botswana Pula had major exchange rate swings they expect Kalahari Floor Tiles to pay an interim dividend which will be passed on to Olympia shareholders as a full year dividend.
Shareholders questioned the company’s debts, investment decisions & classification, the absence of the chairman’s report from the accounts and a decision to de-list a subsidiary in South Africa to protect it from creditors. On the, promised dividend, shareholders said that they want shilling dividend payments, not cents.
Co-operative Bank of Kenya (Coop) had its 8th AGM (since listing) on Friday 27th May, at Bomas, in Nairobi. At the end of 2015, Kenya’s 3rd largest bank had 342 billion in assets, and profits of Ksh 15 billion. It had Kshs 208 billion in loans and Kshs 265 billion in deposits. The CEO also mentioned that Q1 profit in 2016 was almost Kshs 5 billion and they hoped to attain Kshs 20 billion by the end of 2016.
- Soaring Eagle: The CEO gave an update of the ongoing transformation project that seeks to improve Co-op’s efficiency and services to the 5.9 million customers of the Bank. Now, only 25% transactions are done at branches, as customers have the choice to use other channels like mobile phones, ATM,s internet, or bank agents. Internally, staff are tasked to cross sell bank products & open accounts, and they receive promotions, bonuses, and increments based on KPI’s and appraisals. They consulted with McKinsey for some of this.
- Regional Expansion / Subsidiaries & Associates: They own 60% of Kingdom Securities (stockbrokers), and in South Sudan they own 51% of Coop Bank there, with the government of South Sudan owning the other 49%. The bank went from a loss of Kshs 687 million to a pre tax profit of Kshs 850 million, and the CEO said that Sudanese see the bank as their own, as they have a stake a board and management are local. They plan to use the same joint venture approach to take Coop Bank to Ethiopia, another large closed banking market. They also own 100% of Co-op Consultancy and Co-op Trust Investment Services, 35% of Cooperative insurance (parent of the listed CIC insurance) and 31% of CIC South Sudan.
- Shareholders: The bank has almost 96,000 shareholders who will each receive Kshs 0.8 per share in dividend – and this will total Kshs 3.9 billion in 2015 (up from 2.4 billion). The bank Chairman said that they had to maintain a balance with the dividends paid out so that they they did not have to call on shareholders to put money back in to the bank as it grows. Coop shares were issued after a 2008 IPO at Kshs 9.5, and now trade at 18.3. They have also issued bonus shares (twice?).
Elections: During the shareholder election, the CEO explained two unique points. One was that Coop Holdings which owns 65% of the bank, had already had its AGM and nominate 7 directors (that they are entitled to) and merely forwards the names to the Bank for endorsement at the AGM. Second was that the CMA now requires that companies make shareholders aware that they have audit committees, and to have shareholders vote for the members of the audit committee at the AGM.
- One Shareholder asks about the cost of banking saying that If he deposits Kshs 100 at an agent, Kshs 20 is cut, and there’s another Kshs 50 for each of his ATM withdrawals. The CEO they share these fees with the agents who have to pay for costs like electricity or to run their kiosks. Another one asked that Coop asked the bank to open more agent locations (now at 8,765) to serve other parts of the country.
- Insider Lending at Coop? The CEO assured that all loans taken by directors (total about Kshs 300 million) and employees (about 6.5 billion) are being serviced properly, and that they are known to, and approved by the board. Insider lending had brought down other banks in Kenya, but, he said, this was not an issue at Coop.
- Legal cases? All banks have legal cases, and they highlighted the main ones in the annual report.
KenolKobil had its annual shareholders meeting on May 12, at the Hilton Hotel in Nairobi. The board chairman spoke of the company’s performance in the three years since they had lost Kshs 6.2 billion. They had thereafter embarked on a turnaround that involved reducing costs, divesting from non-performing territories, focusing on profitable business rather than growing their market share, paying down debt, and corporate governance moves (separating the role of Chairman & CEO role) .
- Tanzania: The company would up their short foray in Tanzania where they were losing $2 million a year. They had a depot that was part of their venture was an expensive lease, and while fuel prices in Tanzania are set by the government, many companies sell below that price as they don’t pay taxes. The directors said that Kenol was a responsible company that could not and decided to close shop.
- DRC: They invested here, but did not ship product there as they were not happy. with the business climate and decided to sell out.
- Burundi is doing well despite the political turmoil there.
Dividends: One shareholder said the dividend was too low, but the chairman said they have a consistent policy of paying 25% of net profit as dividend, while the Group MD (GMD) said they still had to pay down a lot of debt. One long-term shareholder told the meeting, that it was better for the company to be conservative with dividends, rather than aggressive, like other companies, and come back in a few years to ask shareholders to invest more money in a right issues
Property: They have decided not to put up an office building in Haile Selassie street in downtown Nairobi for now as the office property market is saturated.
Goodies: Lunch box (which Hilton guards would not allow to be eaten on site), and tote bag. Some shareholders pleaded for the company to provide them with caps and umbrellas to promote the brand.
Odd Point: One shareholder asked why the AGM had not started with prayers. The Chairman said it would not be productive, as they would have to have prayers for Christian, Muslim, Jewish, and traditional African religions to be fair to all shareholders present.
The 2014 annual general meeting (AGM) of Unga Ltd. shareholders took place at KICC in Nairobi on December 2 2014. The meeting started on time, and with good attendance, and the set-up was different with the ‘speaker’ (primarily the Chairperson) using a lectern as opposed to answering questions while seated.
- Maize milling is not very profitable due to tax evading competition at the county level and has been brought back in-house to control the consistency of quality and supply. Also, Unga has implemented new Route-to-Market strategies and is opening up stores/warehouses that sell exclusively Unga products to overcome distribution problems in some areas.
- Unga wants to become a ‘nutrition company’ versus remaining a miller. Therefore Unga has ventured into selling cereals e.g. beans, green grams, etc packaged under ‘Amana’ to attract high-end shoppers.
- Unga got shareholder approval to buy 52% of Ennsvalley Bakery which retails its products through high-end outlets e.g. Nakumatt. Unga’s board (CEO spoke on this) feels Unga can revamp the firm to expand rapidly with a larger product range. The purchase of 52% in Ennsvalley is being financed by the proceeds from the sale of its 51% stake in Bullpak (for Kshs. 335M) and additional cash from internal operations. Unga will also loan additional funds to Ennsvalley at 15%.
- There were interesting (& relevant) questions including the feeling that the sale of Bullpak was ‘cheap’ given the profitability of Bullpak. Some shareholders questioned the high purchase price multiples of Ennsvalley given the low sale price multiple of Bullpak. (Bullpak was a cash cow vs the cash hog Ennsvalley will be for a few years). Also, one of the Unga directors had to declare his interest in Ennsvalley though the extent of his family’s ownership wasn’t stated.
- There was a discussion on GMOs and the MD said that, by seeing world trends, it is just a matter of time before the Government of Kenya has little choice but to approve GMO cereals especially if the region suffers extended drought conditions.
- SWAG? No more bales of flour to be given to shareholders as the cost is too high on a per shareholder basis. This decision was made in earlier years and will remain so in the future.