Category Archives: Olympia Capital

Regional diversification

Taking regional investments a step further – how are various local listed companies doing on the regional front? January 2008 showed that having a focus on Kenya alone could be an Achilles heel despite it being considered one of the strongest economies in the region. Various listed companies are making pushes in East and Central Africa – however many of these countries are all dependent on Kenyan access, hence it’s not really true diversification of political risk. In that sense, Olympia Capital, an NSE laggard may be ahead of its peers with its tangled Botswana and South African corporate moves.

here’s a recap:

  • CMC says regional sales are on target in Uganda and Tanzania (from ½ year results this week)
  • Diamond Trust has set its sights on Burundi (adding to Uganda and Tanzania) while many other banks have targeted Rwanda.
  • East Africa Cables attribute good performance to their subsidiaries in Uganda, Rwanda and Tanzania
  • KCB has subsidiaries in Uganda, Tanzania and S. Sudan (though it wrongly had the flag of Sudan on its’ annual report cover. These countries contribute less than 10% to their income and Ug had a loss of 49 million (setup costs) while Tz barely broke even with a profit of 0.2m in 2007. KCB opened in Kampala in November 07 and will open 6 more Ug branches in 2008, 4 new ones in S. Sudan in 08, and another 20 new branches in Tz over the next two years according to their annual report.
  • Kenol who after acquiring Kobil could be the first 100 billion shilling turnover company, have subsidiaries in Uganda, Tanzania, Rwanda, Zambia and Ethiopia. 80% of their sales are from Kenya, while the other countries contribute about 20%.
  • TPS East Africa acquired 8% of Serena Rwanda which includes Kigali Serena and Lake Kivu Serena. Of Serena’s 2007 sales of Kshs. 3.7 billion (~60 million), Kenya accounted for 64% and Tanzania 36%.
  • Total Oil Kenya has sister companies in Uganda, Tanzania Congo Rwanda so essentially remain a Kenyan company with 97% of their sales being local. They, however, complain in their 2007 report that other countries who should be buying from Kenya are (because of our tax regulations) buying offshore and shipping through Kenya instead.
  • Sameer Africa are looking for transporters to Somalia, DRC, Ethiopia, Rwanda, Sudan, Burundi, Mozambique, Zambia, Malawi Uganda and Tanzania for their products.

Kutwa Tuesday – June 26

Uchumi revealed: Shedding some lights on the Uchumi bond proposal, the receiver manager has stated that the problems that shut down Uchumi had more to do with management style than the market conditions. The newspaper says that the 650 million to be raised, 280 million will go to pay to pay suppliers & creditors, 23 million interest on (bank) loans, 52m to pay terminal benefits of staff, 200m working capital as the company plans to open 3 new branches in Mombasa, Nairobi, and Kisumu.

The article adds that all suppliers have been paid for deliveries made in the last 12 months i.e. the company is profitable. The company had sales of Kshs. 1.3 billion in the first quarter of the year and had 2.8 million shoppers visit their stores. Sarit is their best store with April revenue of 90 million followed by Ngong Rd hyper with 68m (last was Eldoret with 8m) from an offline story in the financial standard.
Note – even if they re-list, won’t they be in the same boat as NBK and be unable to pay dividends for several years?

Rights Issue: Olympia’s rights issue was formally announced today with an offer for shareholders to buy 3 shares for each held.

Newspapers: New newspaper from the KISS team – called the Nairobi Star and billing itself as Kenya’s first full color daily newspaper launches next week
– But what happened to the Kenya Times website frozen on June 8?

Trade not aid
According to , an Oxfam report subsidies are responsible for poverty among African cotton farmers.

Political worm
Raila Odinga gets unfairly blamed for a lot of things, but he is not responsible for a malicious computer virus bearing his name that has caused IT admin’s some headaches this month

uh oh: Why is Obama’s campaign getting stuck?

uh oh 2: Sad to read that former track darling Marion Jones is
almost broke. Even though she wasn’t a big spender like Tyson or Jackson, legal bills fending off drug allegations have taken their toll on her finances.

Uh oh 3 & 4 : Zimbabwe to do a takeover of foreign businesses as Uganda parliamentarians have given Barclays, Sheraton, Kakira Sugar, and Uganda Telecom one year to float part of their share on the Uganda stock exchange.

War what is it good for?
Is there a difference between Somalia, Darfur and Palestine?

Olympia Rights Issue

Olympia capital is seeking to raise 600 million shillings in a rights issue later this year, after approval by shareholders. Part of the proceeds (Kshs. 87 million) will be used to repay a shareholders loan that was used to bridge the purchase of Plush Products in 2006.

The acquisition of Plush is expected to more than double the company’s turnover in 2007 Olympia’s accounts were not qualified, but the auditors have noted that their company has a negative working capital position – which has been offset by gains from the Botswana subsidiary – from which Olympia generates 5X more turnover than it does from Kenya.

More reading on Olympia: (here and here)