Monthly Archives: August 2008

Olympia turnaround?

For the first time in years, Olympia has received clean statements from their auditors (DCDM) and the company resumes paying a dividend of this year of Kshs. 0.20 per share.

Also Paul Wanderi Ndungu, a lawyer who made a windfall with Kenya Airways shares, and is now Olympia’s second largest shareholder with 12.25% behind Dunlop properties, has joined the Olympia Board this year along with John Simba.

The company will also take a majority shareholding in Avon Limited, and Mather & Platt in addition to increasing investment in Heri Limited. But its attachment to Kenya is miniscule with just 5% of revenue from here (95% was from Botswana – up from 85%)

See Olympia accounts summary here.

Nairobi City Council Finances

Amid the record half year bank profits, local authorities (town, municipal, county) are also releasing their year end numbers (June 08)

The finances for the Nairobi City council showed revenue of Kshs. 8.1 billion ($123 million) which came from the following sources; government 2.53 billion, (Nairobi) water company 147m, borrowing of 505m, 772m from business permits, market fees 325m, 1.72 billion ($26m) from property rates, and 649m from parking collections.

Expenditure was the same 8.1 billion shillings comprising payments to councilors of 71 million, salaries amounting to Kshs. 3.7 billion ($56m), operations & maintenance 1b, capital projects (investments) 1.1 b, and debt repayment of Kshs. 2.1 billion)

The popular and celebrated town clerk John Gakuo (who’s vilified by others) remains in office despite a change of guard in the chaotic politics of running Nairobi City.

Also, the local government minister published new accounting rules last month for councils to follow which they must as they on average get about 60% of their revenue from the government, and most are dependent on the Government (taxpayers) for their continued operations.

Scangroup sellout, new bank?

Scangroup takeover WPP acquires effective control over Scangroup which was listed on the NSE in 2006, by buying 27.5% of the company, but not taking over or de-listing. They also have pre-emptive rights over a chunk of CEO Bharat Thakrar (and largest shareholder) stake when his lock-up period expires in 2011. Aly Khan (Rich.co.ke) points out that the slumping NSE offers cheap company shareholding buy opportunities e.g Scangroup and Unilever Tea (going private)

More Libya: 2010 may see another bank to Kenya this time Libyan / Ugandan Tropical bank. Does Kenya need another bank really? And $19 million share capital won’t go very far these days.

Entrepreneur Opportunity: The 2008 Pioneers of Prosperity Africa Awards rewards six business leaders of Africa who serve as role models to Africa’s aspiring entrepreneurs and demonstrate business excellence, innovation, and profitability. Submissions will be accepted from Botswana, Cameroon, Cote d’Ivoire, Ghana, Kenya, Namibia, Nigeria, Rwanda, South Africa and Uganda and a total of $350,000 will be awarded to the winners. D/L 31 August 2008.

Coop Bank IPO is Next

NSE is overweight with financial shares, and may get heavier with the listing of Co-operative Bank later this year. The listing is expected to raise 10 billion shillings ($150 million) for growth and expansion. The shareholders transferred the assets and liabilities of the bank to a limited liability company (from a co-operative socirty) last week. – and their class B shares (par value Kshs. 100 shillings will be split into shares of par value Kshs. 1)

However as a long suffering customer of the bank, I may not add to might already overweight basket of financial stocks.

edit – Co-Op IPO opens October 20 2008

elsewhere

transport

– Kenya Airways; are offering a novel business trip package – 4 trips for $1,000 to be completed by March 2009 for trips to Dubai, Bangkok, honk Kong, Guangzhou
– Delta airlines open a Nairobi office
Railway destiny in local hands
– The Government wants Rift Valley Railways to increase capacity, lay more tracks, and transfer cargo ASAP. ICDCI looks at RVR as a long term investment, but they hope to get return on the investment within 4 years. They own 10% of the company and will acquire another 10% from IFC over the next four years.

Communications
– Zain will increase share capital by 75% (raising $4.5 billion) from its Kuwaiti shareholders for expansion in Africa. They are already advertising to put up base stations and adding dealers in Kenya
– good to know Econet has the most subscribers in Zimbabwe.. That’s an ARPU in millions?

Dividend cycles
how long goes it take some NSE companies to pay declared dividends?

One month: Standard chartered (interim), Kenol (interim)

Two months: Barclays, BAT, Olympia

Three months Crown Paints, TPSEA (Serena), Jubilee, Nation Media, Total, HFCK, Diamond Trust, Pan Africa, NIC, Standard Chartered (final), Bamburi (interim)

Four months: Centum (ICDCI), Standard Newspapers, Access Kenya, Eveready, Bamburi (final)

Five months: Kenya Re, Kenya airways, Express, Rea Vipingo