20% retail
30% corporate
temporary post
Friday, May 30, 2008
Diamond Trust 2008 AGM
Diamond Trust (DTB) held their AGM at KICC on Friday May 30. It was quite routine and the Chairman rapidly breezed through the vote items – annual accounts, re-election of directors, auditors’ yada, yada.
Extraordinary items were:
Expansion into East Africa: shareholders voted for the company to take up rights in DTB Uganda (probably cross 51% and making that a subsidiary) and to set-up in Burundi. Questions were asked on if more capital would be called upon from Kenyan shareholders and the difficulty of expanding into an unstable, war-torn, francophone country. The Chairman answered that the funds from the last rights issued (2007) were being utilized for the expansion and they have researched and visited the country which is now stable part of the East African community. He added that new CEO identified for Burundi is multi-lingual as are some Kenyan staff that may join the burning office.
The hot button issue of the day was the various amendments to the companies’ act that would enable the company to sell shares of dormant investors. The motions targeted shareholders who have ceased to be active; i.e. forwarding address, no dividends banked or bonuses taken up, mail returned etc. for over six (6) consecutive years. The company loses a lot of money in a bid to ‘serve’ these shareholders and was making moves to clean up their share register.
Steps followed would be to:
- Identify the shareholders dormant for six years
- Publish their names in the east African media, calling on these individual/their relatives to step forward
- For those who have not responded the company will then apply for permission to sell these shares at market rates
- Proceeds of sale will be held in trust for another three years
- After this (nine dormant years) such funds not claimed will revert back to the company’s shareholders funds.
The directors stressed that they were reluctantly making these moves in a bid to be on par with other companies (including yet to list Safaricom) and it would also keep them a step ahead of the government who have already made into law that dividends unclaimed seven years will revert to the Government (CMA investor compensation fund)
Several shareholders expressed their concerns and objections, saying this was a dangerous precedent, and citing (among other reasons);
- shareholders who were out of the county directors said they should just forward their correct address to the registrars
- shareholders who had died their dependants should contact the company
- shareholders whose shares had been lost to ‘rogue’ brokers that was a matter for the regulators
- shareholders who had not disclosed holdings to their families, and perhaps died
- company should only focus on unclaimed dividends, not selling shares
- shareholders with no bank accounts
They also came up with suggestions including DTB to
- provide a beneficiary form for investors to fill out beforehand (directors’ answered that it was a company’s act matter)
- DTB to buy more shares with unclaimed dividend for dormant shareholders (an investment decision that was every risky to the company)
- DTB not to sell the shares which may bring lawsuits in future, but instead ring-fencing the dormant shareholders and treating them differently (the laws of Kenya require all shareholder to be served equally (Mobitelea, anyone??)
DTB’s legal adviser, lawyer George Oraro explained that shareholders had ample time (nine years) to sort out any dormant share matters and that DTB would even exceptionally consider cases where investors with were not able to sort out their affairs in time. He added that in future the CDSC (not company registrars) would be the custodians of all share accounts
The motion was eventually passed
Goodies: Tote bag (with DTB cap, spiral notebook) lunch box (juice, water, apple, samosa, drumstick, chicken pie)
Hat tip: Coldtusker was in the house and asked some pertinent questions.
Extraordinary items were:
Expansion into East Africa: shareholders voted for the company to take up rights in DTB Uganda (probably cross 51% and making that a subsidiary) and to set-up in Burundi. Questions were asked on if more capital would be called upon from Kenyan shareholders and the difficulty of expanding into an unstable, war-torn, francophone country. The Chairman answered that the funds from the last rights issued (2007) were being utilized for the expansion and they have researched and visited the country which is now stable part of the East African community. He added that new CEO identified for Burundi is multi-lingual as are some Kenyan staff that may join the burning office.
The hot button issue of the day was the various amendments to the companies’ act that would enable the company to sell shares of dormant investors. The motions targeted shareholders who have ceased to be active; i.e. forwarding address, no dividends banked or bonuses taken up, mail returned etc. for over six (6) consecutive years. The company loses a lot of money in a bid to ‘serve’ these shareholders and was making moves to clean up their share register.
Steps followed would be to:
- Identify the shareholders dormant for six years
- Publish their names in the east African media, calling on these individual/their relatives to step forward
- For those who have not responded the company will then apply for permission to sell these shares at market rates
- Proceeds of sale will be held in trust for another three years
- After this (nine dormant years) such funds not claimed will revert back to the company’s shareholders funds.
The directors stressed that they were reluctantly making these moves in a bid to be on par with other companies (including yet to list Safaricom) and it would also keep them a step ahead of the government who have already made into law that dividends unclaimed seven years will revert to the Government (CMA investor compensation fund)
Several shareholders expressed their concerns and objections, saying this was a dangerous precedent, and citing (among other reasons);
- shareholders who were out of the county directors said they should just forward their correct address to the registrars
- shareholders who had died their dependants should contact the company
- shareholders whose shares had been lost to ‘rogue’ brokers that was a matter for the regulators
- shareholders who had not disclosed holdings to their families, and perhaps died
- company should only focus on unclaimed dividends, not selling shares
- shareholders with no bank accounts
They also came up with suggestions including DTB to
- provide a beneficiary form for investors to fill out beforehand (directors’ answered that it was a company’s act matter)
- DTB to buy more shares with unclaimed dividend for dormant shareholders (an investment decision that was every risky to the company)
- DTB not to sell the shares which may bring lawsuits in future, but instead ring-fencing the dormant shareholders and treating them differently (the laws of Kenya require all shareholder to be served equally (Mobitelea, anyone??)
DTB’s legal adviser, lawyer George Oraro explained that shareholders had ample time (nine years) to sort out any dormant share matters and that DTB would even exceptionally consider cases where investors with were not able to sort out their affairs in time. He added that in future the CDSC (not company registrars) would be the custodians of all share accounts
The motion was eventually passed
Goodies: Tote bag (with DTB cap, spiral notebook) lunch box (juice, water, apple, samosa, drumstick, chicken pie)
Hat tip: Coldtusker was in the house and asked some pertinent questions.
Thursday, May 29, 2008
Total 2008 AGM
excerpts
Total Kenya’s Managing Director Bertrand Fontanges follows in the footsteps of previous Chairman Momar Nguer (or is it a French company thing?) to AGM to educate shareholders on the state of their company and the industry in an hour long presentation on Wednesday.
Oil sector grew at 6.5% last year which coincided with country’s economic growth. The market share of the companies at the end of 2007 was Kenol/Kobil 22.4%, Shell 21.8%, Total 21.2%, Chevron 13%, Oil Libya 7.3%, NOCK 2.4% and independents 11.5%.
Challenges include;
The Government; makes all oil companies tender for oil together, for which they have to pay upfront. He referred to the process as they pre-finance the government - on top of which they pay Kshs. 30 per litre of petrol (~$0.48) and 20 per diesel litre. They also pay upfront taxes for fuel they export (i.e. to other African countries) - but don’t get refunded for at least six month after they claim. As such they have reduced their export amounts as it is not viable. He’s the second CEO in a month to put the government on blast after Eveready also went after KRA and KEBS.
The Pipeline: the oil pipeline which has capacity constraints. At least expansion of the Nairobi-Mombasa pipeline expansion should be complete by year end which should double capacity and end the constraint problem.
The Mombasa refinery; given the opportunity, none of the companies would use the refinery which is outdated, inefficient and makes products expensive - yet they have to refine about 50% of their products there. He added that independents don't process at the refinery which gives them an ‘unfair; advantage.
LPG i.e. cooking gas. He expressed concern and they have cautioned the Government about the proliferation of illegal re-fillers in the market. These are companies who refill gas cylinders – saying there are safety issues (they can explode) and consumers cannot ascertain the quantity of gas in the tanks from these shops.
Aviation Gas margins in aviation have become so low that they have reduced their sales there and will wait till the market improves before they go back in.
Despite all, the company’s performance improved (EPS of Kshs. 2.99 from 2.7 – out of which a dividend of 2.5 will be paid) thanks to asset sales, Kengen and reduced financial costs. Of the 623KMT of sales, 21% (134KMT) are through their petrol station network while 78% (498KMT) is though bulk, general trade, big companies etc.
Finance charges: Have been an albatross at Total for years. The price of oil (Murban crude) has doubled over the last year to about $120 per barrel (even though some OPEC officials say it should be $60 - $70) and the cost of holding inventory has likewise doubled. So Total has resorted to carrying only as much inventory as is needed, and requiring customers to pay up front.
Kengen awarded a contract to Total which runs for almost another two years. It is not part of the government tender process so they are able to get supplier credit for the oil which has reduced their borrowing charges significantly. (2006 Q3 had financial costs of Kshs. 415m compared to Kshs. 287m in Q3 of 2007).
Total Kenya’s Managing Director Bertrand Fontanges follows in the footsteps of previous Chairman Momar Nguer (or is it a French company thing?) to AGM to educate shareholders on the state of their company and the industry in an hour long presentation on Wednesday.
Oil sector grew at 6.5% last year which coincided with country’s economic growth. The market share of the companies at the end of 2007 was Kenol/Kobil 22.4%, Shell 21.8%, Total 21.2%, Chevron 13%, Oil Libya 7.3%, NOCK 2.4% and independents 11.5%.
Challenges include;
The Government; makes all oil companies tender for oil together, for which they have to pay upfront. He referred to the process as they pre-finance the government - on top of which they pay Kshs. 30 per litre of petrol (~$0.48) and 20 per diesel litre. They also pay upfront taxes for fuel they export (i.e. to other African countries) - but don’t get refunded for at least six month after they claim. As such they have reduced their export amounts as it is not viable. He’s the second CEO in a month to put the government on blast after Eveready also went after KRA and KEBS.
The Pipeline: the oil pipeline which has capacity constraints. At least expansion of the Nairobi-Mombasa pipeline expansion should be complete by year end which should double capacity and end the constraint problem.
The Mombasa refinery; given the opportunity, none of the companies would use the refinery which is outdated, inefficient and makes products expensive - yet they have to refine about 50% of their products there. He added that independents don't process at the refinery which gives them an ‘unfair; advantage.
LPG i.e. cooking gas. He expressed concern and they have cautioned the Government about the proliferation of illegal re-fillers in the market. These are companies who refill gas cylinders – saying there are safety issues (they can explode) and consumers cannot ascertain the quantity of gas in the tanks from these shops.
Aviation Gas margins in aviation have become so low that they have reduced their sales there and will wait till the market improves before they go back in.
Despite all, the company’s performance improved (EPS of Kshs. 2.99 from 2.7 – out of which a dividend of 2.5 will be paid) thanks to asset sales, Kengen and reduced financial costs. Of the 623KMT of sales, 21% (134KMT) are through their petrol station network while 78% (498KMT) is though bulk, general trade, big companies etc.
Finance charges: Have been an albatross at Total for years. The price of oil (Murban crude) has doubled over the last year to about $120 per barrel (even though some OPEC officials say it should be $60 - $70) and the cost of holding inventory has likewise doubled. So Total has resorted to carrying only as much inventory as is needed, and requiring customers to pay up front.
Kengen awarded a contract to Total which runs for almost another two years. It is not part of the government tender process so they are able to get supplier credit for the oil which has reduced their borrowing charges significantly. (2006 Q3 had financial costs of Kshs. 415m compared to Kshs. 287m in Q3 of 2007).
Tuesday, May 27, 2008
IPO daylight
IPO hangover: Went to visit stockbroker today in an unsuccessful search for the elusive Housing Finance prospectus – and instead found several notices on the wall:
- no mas they have suspended opening new CDS or receiving transfers from other stockbrokers for a month to 30/6( until they sort out their applications post-Safaricom IPO applications)
- investor awareness they advise how investors can watch rogue trades in their accounts and how to report them including getting correct address in the system. They also assure customers they are with a solid stockbroking firm that has over 40 billion shillings in assets
- cost increases - nominee accounts will now attract quarterly fee and transaction fees over and above commissions costs
- 1/2 way to DRIP: they will no longer en-cash dividend cheques, but they can be endorsed towards new purchases of shares.
Oil and manufacturing: Looking at the price warning from Sameer Africa, makes one wonder about the impact that the escalating price of oil will have on manufacturing based company shares (e.g. cement is up about 40%) - and whether it is wiser to invest in ‘service’ companies like Safaricom whose impact from oil prices will less direct (share of wallet)
Full year results
- Safaricom revenue to 61.4 billion [$990 million] (up 29%)
- Safaricom pre tax profit 19.9 billion [$321 million] (up 16%)
Petro Politics & Policy: Reading Thomas Freidman’s columns can scare any one cares about the future of America, foreign policy relations and other manufacturing industries.
Writing recently, he notes:
- The failure of Mr. Bush to fully mobilize the most powerful innovation engine in the world — the U.S. economy — to produce a scalable alternative to oil has helped to fuel the rise of a collection of petro-authoritarian states — from Russia to Venezuela to Iran — that are reshaping global politics in their own image.
- If this huge transfer of wealth to the petro-authoritarians continues, power will follow. According to Congressional testimony Wednesday by the energy expert Gal Luft, with oil at $200 a barrel, OPEC could “potentially buy Bank of America in one month worth of production, Apple computers in a week and General Motors in just three days.”
- America has taken its many natural assets — its research universities, free markets and diversity of human talent — and assumed that they will always compensate for our low savings rate or absence of a health care system or any strategic plan to improve our competitiveness.
- “Call it the triple deficit,” said Mr. Rothkopf. “A fiscal deficit that will soon have us choosing between rationed health care, sufficient education, adequate infrastructure and traditional levels of defense spending, a trade deficit that has us borrowing from our rivals to the point of real vulnerability, and a geopolitical deficit that is a legacy of Iraq, which may result in hesitancy to take strong stands where we must.”
- no mas they have suspended opening new CDS or receiving transfers from other stockbrokers for a month to 30/6( until they sort out their applications post-Safaricom IPO applications)
- investor awareness they advise how investors can watch rogue trades in their accounts and how to report them including getting correct address in the system. They also assure customers they are with a solid stockbroking firm that has over 40 billion shillings in assets
- cost increases - nominee accounts will now attract quarterly fee and transaction fees over and above commissions costs
- 1/2 way to DRIP: they will no longer en-cash dividend cheques, but they can be endorsed towards new purchases of shares.
Oil and manufacturing: Looking at the price warning from Sameer Africa, makes one wonder about the impact that the escalating price of oil will have on manufacturing based company shares (e.g. cement is up about 40%) - and whether it is wiser to invest in ‘service’ companies like Safaricom whose impact from oil prices will less direct (share of wallet)
Full year results
- Safaricom revenue to 61.4 billion [$990 million] (up 29%)
- Safaricom pre tax profit 19.9 billion [$321 million] (up 16%)
Petro Politics & Policy: Reading Thomas Freidman’s columns can scare any one cares about the future of America, foreign policy relations and other manufacturing industries.
Writing recently, he notes:
- The failure of Mr. Bush to fully mobilize the most powerful innovation engine in the world — the U.S. economy — to produce a scalable alternative to oil has helped to fuel the rise of a collection of petro-authoritarian states — from Russia to Venezuela to Iran — that are reshaping global politics in their own image.
- If this huge transfer of wealth to the petro-authoritarians continues, power will follow. According to Congressional testimony Wednesday by the energy expert Gal Luft, with oil at $200 a barrel, OPEC could “potentially buy Bank of America in one month worth of production, Apple computers in a week and General Motors in just three days.”
- America has taken its many natural assets — its research universities, free markets and diversity of human talent — and assumed that they will always compensate for our low savings rate or absence of a health care system or any strategic plan to improve our competitiveness.
- “Call it the triple deficit,” said Mr. Rothkopf. “A fiscal deficit that will soon have us choosing between rationed health care, sufficient education, adequate infrastructure and traditional levels of defense spending, a trade deficit that has us borrowing from our rivals to the point of real vulnerability, and a geopolitical deficit that is a legacy of Iraq, which may result in hesitancy to take strong stands where we must.”
Saturday, May 24, 2008
Business Briefs – May 24
most from the papers this week
Strathmore to train entrepreneurs: Strathmore University has launched an Enterprise Development Centre (SEDC) to train entrepreneurs in management of SME's. This will be done through a six month certificate program in entreprenual management that covers, among other aspects, taxation & law, financial recordkeeping, managing HR, business planning, risk management, diversification, capital budgeting and excellence in customer service. It will use locally developed case studies and also provide networking opportunities and access to service providers through a business club.
ARM split: Athi River Mining intends to spin off its cement, and mineral & chemical operations into two wholly owned subsidiaries;
- ARM Cement Limited – who will continue with the manufacture and sell cement and limestone – (the new Kaloleini factory will be transferred to the subsidiary)
- ARM Minerals & Chemicals Limited – who will produce minerals and sodium silicate building products – (the Athi River factory will be transferred to the subsidiary)
Invest in Uchumi: Gearing up for a revival is Uchumi Supermarkets whose Receiver Manager has places an international tender for financial firms who will assist in the for (i) pre-qualification of financial bidders and (ii) selection of winning bids to become strategic equity partners (new investors in Uchumi). D/L is 6/6
Milky at NSE?: Preparing for a possible listing at the Nairobi Stock Exchange is New KCC who published their financial accounts this week for the year ended June 2007, which showed that they had exceeded the performance over the previous 18 month period; New KCC had assets of 4.7 billion shillings (up from 4.0b in 18 months to 06/2006), turnover of 4.5 billion (compared to 4.9b) and a pre-tax profit of 284 million (compared to 350 m) – after paying over 2 billion shillings to dairy farmers. Meanwhile Sameer is making dairy waves in Uganda
Derailment?: Rift Valley Railways in trouble with the Governments of Kenya and Uganda over the performance of the railway concession. Last year it appeared they had turned the corner in terms of performance.
FYI: You can track NSE shares in real time for free at Rich.co.ke
Strathmore to train entrepreneurs: Strathmore University has launched an Enterprise Development Centre (SEDC) to train entrepreneurs in management of SME's. This will be done through a six month certificate program in entreprenual management that covers, among other aspects, taxation & law, financial recordkeeping, managing HR, business planning, risk management, diversification, capital budgeting and excellence in customer service. It will use locally developed case studies and also provide networking opportunities and access to service providers through a business club.
ARM split: Athi River Mining intends to spin off its cement, and mineral & chemical operations into two wholly owned subsidiaries;
- ARM Cement Limited – who will continue with the manufacture and sell cement and limestone – (the new Kaloleini factory will be transferred to the subsidiary)
- ARM Minerals & Chemicals Limited – who will produce minerals and sodium silicate building products – (the Athi River factory will be transferred to the subsidiary)
Invest in Uchumi: Gearing up for a revival is Uchumi Supermarkets whose Receiver Manager has places an international tender for financial firms who will assist in the for (i) pre-qualification of financial bidders and (ii) selection of winning bids to become strategic equity partners (new investors in Uchumi). D/L is 6/6
Milky at NSE?: Preparing for a possible listing at the Nairobi Stock Exchange is New KCC who published their financial accounts this week for the year ended June 2007, which showed that they had exceeded the performance over the previous 18 month period; New KCC had assets of 4.7 billion shillings (up from 4.0b in 18 months to 06/2006), turnover of 4.5 billion (compared to 4.9b) and a pre-tax profit of 284 million (compared to 350 m) – after paying over 2 billion shillings to dairy farmers. Meanwhile Sameer is making dairy waves in Uganda
Derailment?: Rift Valley Railways in trouble with the Governments of Kenya and Uganda over the performance of the railway concession. Last year it appeared they had turned the corner in terms of performance.
FYI: You can track NSE shares in real time for free at Rich.co.ke
Thursday, May 22, 2008
Kakuzi 2008 AGM
some excerpts
This small company meeting at the Norfolk shows the importance of having a Chairman (Dr. T R Fowkes) who can knows the company well and can interact well with the shareholders. It also shows the pitfalls of having an enlightened shareholding, who can ask some uncomfortable questions of the board, when they don't receive dividends.
Auditors were a hot button issue today as shareholders questioned the level of disclosure in the financial statements, level of segment reporting e.g. on sale of timber pole to KPLC. The Kakuzi FC said they were sold at about Kshs. 12,000 per pole (and the Chairman said that operating segments reporting will be come a requirement from 2009 – IFRS 8 as will other rules, while the auditor from Pricewaterhousecoppers said it was up to the board to choose which rules to apply before the deadline). The independence of valuations (Siret Tea assets were valued by the Board) was also challenged, and the auditor basically explained that the board was responsible for the accounts (washed his hands, as one shareholder put it), while the Chairman assured shareholders that everything material was in the accounts presented, and that the auditors had seen all the detailed accounts.
Dividends: No dividends for yet another year. The Chairman explained that the company had a largely paper profit (from the revaluation of biological assets), not an operational so the company could not afford dividends. The board was focused on reducing the company debt and payment of dividends was just not possible – essentially they’d have to borrow money to pay dividends. They could also try and sell more assets (but the sale of Siret Tea Estates last year generated a lot of controversy).
Crops: Kakuzi have uprooted all their coffee to be replaced with macadamia. They are likely to uproot citrus. Meanwhile avocado sales to France are doing well though there are no direct shipping routes.
Del Monte joint venture: The board has signed a new deal with Del Monte and will increase acreage of pineapples. They previously had a long running lucrative deal but which Del Monte tore up. After protracted negotiations, the joint venture has resumed, but with terms not as super for Kakuzi.
Land one shareholder asked about the safety of company land if the government chooses to resettle people. Chairman said most of their land had 999 year leases from the beginning of the last Century.
Outlook for 2008 the Chairman said that this would be determined by four things which were being the company’s control:
- World tea prices. They were good earlier in the year, but company could not take advantage owing to post-election violence
- Rainfall in Nandi. There was a drought period in Q1 with production at only 61% but rains have been good in April/May.
- Avocado prices in Europe.
- The exchange rate. The Chairman believes the shilling is artificially strong and this may wipe out any gains from world tea prices.
Goodies most unique so far; a Kakuzi produce carton [with a Siret tea pack? and a pineapple], also soda and bitings.
This small company meeting at the Norfolk shows the importance of having a Chairman (Dr. T R Fowkes) who can knows the company well and can interact well with the shareholders. It also shows the pitfalls of having an enlightened shareholding, who can ask some uncomfortable questions of the board, when they don't receive dividends.
Auditors were a hot button issue today as shareholders questioned the level of disclosure in the financial statements, level of segment reporting e.g. on sale of timber pole to KPLC. The Kakuzi FC said they were sold at about Kshs. 12,000 per pole (and the Chairman said that operating segments reporting will be come a requirement from 2009 – IFRS 8 as will other rules, while the auditor from Pricewaterhousecoppers said it was up to the board to choose which rules to apply before the deadline). The independence of valuations (Siret Tea assets were valued by the Board) was also challenged, and the auditor basically explained that the board was responsible for the accounts (washed his hands, as one shareholder put it), while the Chairman assured shareholders that everything material was in the accounts presented, and that the auditors had seen all the detailed accounts.
Dividends: No dividends for yet another year. The Chairman explained that the company had a largely paper profit (from the revaluation of biological assets), not an operational so the company could not afford dividends. The board was focused on reducing the company debt and payment of dividends was just not possible – essentially they’d have to borrow money to pay dividends. They could also try and sell more assets (but the sale of Siret Tea Estates last year generated a lot of controversy).
Crops: Kakuzi have uprooted all their coffee to be replaced with macadamia. They are likely to uproot citrus. Meanwhile avocado sales to France are doing well though there are no direct shipping routes.
Del Monte joint venture: The board has signed a new deal with Del Monte and will increase acreage of pineapples. They previously had a long running lucrative deal but which Del Monte tore up. After protracted negotiations, the joint venture has resumed, but with terms not as super for Kakuzi.
Land one shareholder asked about the safety of company land if the government chooses to resettle people. Chairman said most of their land had 999 year leases from the beginning of the last Century.
Outlook for 2008 the Chairman said that this would be determined by four things which were being the company’s control:
- World tea prices. They were good earlier in the year, but company could not take advantage owing to post-election violence
- Rainfall in Nandi. There was a drought period in Q1 with production at only 61% but rains have been good in April/May.
- Avocado prices in Europe.
- The exchange rate. The Chairman believes the shilling is artificially strong and this may wipe out any gains from world tea prices.
Goodies most unique so far; a Kakuzi produce carton [with a Siret tea pack? and a pineapple], also soda and bitings.
Wednesday, May 21, 2008
Share Portfolio: May 2008
treading water, pre-Safaricom
The Stable
Diamond Trust
Express
KCB
Scangroup
Sameer
Stanbic (UG)
Safaricom (?)
Total
What's changed?
In: Safaricom
Out: ICDCI (Centum)
Increase: none
Lightened: KCB
Dividends expected: Diamond trust, KCB, Express, Total, Scangroup, Stanbic
Unexpected gains/losses: none
Best Performer: Stanbic (Ug), then Scangroup
Worst Performer: Express
Looking forward to: Increasing Safaricom holdings after the expected ⅓ IPO allocation, then Kenya Pipeline, Co-Op Bank (though their service is poor) and whatever other IPO comes along.
Performance Summary: The Motley Fool advises that investors should beat the share index to consider their returns a success. The NSE 20 share index is where it was six months ago: 5,153 (-0.08%), while I’m down 0.44% even after taking some cash out (chucking Centum) to meet unexpected January/February 08 payments and am still waiting for all the afore-mentioned 2007 dividends half way into the year.
Earlier portfolio summaries: - ½ a year ago November 2007 and a year ago.
The Stable
Diamond Trust
Express
KCB
Scangroup
Sameer
Stanbic (UG)
Safaricom (?)
Total
What's changed?
In: Safaricom
Out: ICDCI (Centum)
Increase: none
Lightened: KCB
Dividends expected: Diamond trust, KCB, Express, Total, Scangroup, Stanbic
Unexpected gains/losses: none
Best Performer: Stanbic (Ug), then Scangroup
Worst Performer: Express
Looking forward to: Increasing Safaricom holdings after the expected ⅓ IPO allocation, then Kenya Pipeline, Co-Op Bank (though their service is poor) and whatever other IPO comes along.
Performance Summary: The Motley Fool advises that investors should beat the share index to consider their returns a success. The NSE 20 share index is where it was six months ago: 5,153 (-0.08%), while I’m down 0.44% even after taking some cash out (chucking Centum) to meet unexpected January/February 08 payments and am still waiting for all the afore-mentioned 2007 dividends half way into the year.
Earlier portfolio summaries: - ½ a year ago November 2007 and a year ago.
Tuesday, May 20, 2008
Wanted NSE II
Accurate NSE data
Yesterday, I flipped through all the business news stories, and noted stock market rather flat/ with little trade activity But the 9 PM Nation news had Great News for Nation Media Group and Equity Bank whose shares jumped by 20 shillings to 356 and 15 shillings to 276 respectively. Funnily that had not caught my eye, on my phone updates, the Rich newsletter or even the KTN news. The Nation news ticker did not have the NMG share price, but it had Equity down by 1 to 259 shillings – and watching business news on Citizen TV later had Nation down by 17 shillings to 333 as did the CNBC Africa stock ticker.
It seems that since the NSE stopped updating their site on May 7, there seems to be a wide interpretation of how the days trading went. NSE Update: they now have yesterday’s prices list, and will probably follow with the company announcements made over the last two weeks
Stockbroker director info
In dealing with rogue stockbrokers, investors should be vigilant, read their statements from stockbrokers and the CDS, read newspapers, especial the Business Daily, browse stockskenya and other online forums – and visit and observe their banks and brokers.
There are warning signs given out which some heed. There are people who got out of pyramid schemes early and there are customers of Nyaga stockbrokers who observed the shady deals n their statement, complained and had their accounts "restored”. Some stayed on believing these errors, while others walked away before the fall, moving their share accounts intact.
A follow up to the where to buy shares series and following in the footsteps of great posts by Emerging Africa and Riba Capital. Many investors only came to know the director(s) of Nyaga Stockbrokers after the fall, so get to know the directors of the others before you invest
information from stockbroker websites, and Google caches
1. Afrika Investment Bank: Directors: Kibuga Kariithi, George Maina, Ken Wathome, Linus Gitahi.
2. Apex Africa: (no info online)
3. Bob Mathews: (no info online)
4. CFCFS wholly owned subsidiary of CFC and CFCFS Board of Directors comprises of Charles Njonjo - Chairman, Andrew Douglas Gregory, Sunil Sanger – MD, J.G Kiereini, Uday Jani, M. Soundararajan
5. Crossfield: Chairman-Nilesh J. Kotedia, J.T Swaley, Kumar Krishna (MD), Herbert Joseph Gore (GM)
6. Discount Securities (no info at site, but cache yields bios of directors– but which could be outdated; Chairman- William Murungu, Allan Simu, Executive Director- David Githaiga….)
7. Drummond Investment Bank (no information of directors at site, but Google cache yields bios of staff and their contacts – but which could be outdated: Ndungíu Gathinji (Chairman)….._)
8. Dyer & Blair : Has bios of key staff online: Jimnah Mbaru- Chairman, Mohammed Hassan- Joint Managing Director and Co-Chief Executive ……..)
9. Faida Investment Bank: Bob Karina (MD).
10. Kestrel Capital: Charles Field-Marsham, Founder and Director, Andre DeSimone, Executive Director.
11. Ngenye Kariuki is wholly owned by the Ngenye Kariuki family. (no info at site, but cache yields bios of staff and their contacts – but which could be outdated).
12. Reliable Securities (none), but Mr. Josephat Konzolo is the managing director.
13. Renaissance Capital: no info online but media reports have chief executive - Maina Mwangi, Terry Davidson, Mutahi Kagwe as directors
14. Solid Investments: Was previously 75% owned by Kithinji Kiragu. Other shareholders include the estates of former shareholders Mr. Cyrus Ita, a former Siakago MP and Mr. Dominic Kavuu, a former senior manager at Standard Chartered Bank (K). It will be renamed NIC Capital Securities after NIC acquired 58% for 157 million shillings in 2007.
15. Standard Investment Bank: (no info online) Media reports that Mr. Amish Gupta will be in charge after leaving Renaissance early this year.
16. Sterling Investments: Stanley Ngaine (Chairman), John E. Kirimi, Ahmed S. Ndope, David Ithanya.
17. Suntra: James H R Murigu (MD), Nguru Wachira (Chairman), George Ongaya-Okoth, David Kinyua Waweru, Mr. Fred Ngatia.
Yesterday, I flipped through all the business news stories, and noted stock market rather flat/ with little trade activity But the 9 PM Nation news had Great News for Nation Media Group and Equity Bank whose shares jumped by 20 shillings to 356 and 15 shillings to 276 respectively. Funnily that had not caught my eye, on my phone updates, the Rich newsletter or even the KTN news. The Nation news ticker did not have the NMG share price, but it had Equity down by 1 to 259 shillings – and watching business news on Citizen TV later had Nation down by 17 shillings to 333 as did the CNBC Africa stock ticker.
It seems that since the NSE stopped updating their site on May 7, there seems to be a wide interpretation of how the days trading went. NSE Update: they now have yesterday’s prices list, and will probably follow with the company announcements made over the last two weeks
Stockbroker director info
In dealing with rogue stockbrokers, investors should be vigilant, read their statements from stockbrokers and the CDS, read newspapers, especial the Business Daily, browse stockskenya and other online forums – and visit and observe their banks and brokers.
There are warning signs given out which some heed. There are people who got out of pyramid schemes early and there are customers of Nyaga stockbrokers who observed the shady deals n their statement, complained and had their accounts "restored”. Some stayed on believing these errors, while others walked away before the fall, moving their share accounts intact.
A follow up to the where to buy shares series and following in the footsteps of great posts by Emerging Africa and Riba Capital. Many investors only came to know the director(s) of Nyaga Stockbrokers after the fall, so get to know the directors of the others before you invest
information from stockbroker websites, and Google caches
1. Afrika Investment Bank: Directors: Kibuga Kariithi, George Maina, Ken Wathome, Linus Gitahi.
2. Apex Africa: (no info online)
3. Bob Mathews: (no info online)
4. CFCFS wholly owned subsidiary of CFC and CFCFS Board of Directors comprises of Charles Njonjo - Chairman, Andrew Douglas Gregory, Sunil Sanger – MD, J.G Kiereini, Uday Jani, M. Soundararajan
5. Crossfield: Chairman-Nilesh J. Kotedia, J.T Swaley, Kumar Krishna (MD), Herbert Joseph Gore (GM)
6. Discount Securities (no info at site, but cache yields bios of directors– but which could be outdated; Chairman- William Murungu, Allan Simu, Executive Director- David Githaiga….)
7. Drummond Investment Bank (no information of directors at site, but Google cache yields bios of staff and their contacts – but which could be outdated: Ndungíu Gathinji (Chairman)….._)
8. Dyer & Blair : Has bios of key staff online: Jimnah Mbaru- Chairman, Mohammed Hassan- Joint Managing Director and Co-Chief Executive ……..)
9. Faida Investment Bank: Bob Karina (MD).
10. Kestrel Capital: Charles Field-Marsham, Founder and Director, Andre DeSimone, Executive Director.
11. Ngenye Kariuki is wholly owned by the Ngenye Kariuki family. (no info at site, but cache yields bios of staff and their contacts – but which could be outdated).
12. Reliable Securities (none), but Mr. Josephat Konzolo is the managing director.
13. Renaissance Capital: no info online but media reports have chief executive - Maina Mwangi, Terry Davidson, Mutahi Kagwe as directors
14. Solid Investments: Was previously 75% owned by Kithinji Kiragu. Other shareholders include the estates of former shareholders Mr. Cyrus Ita, a former Siakago MP and Mr. Dominic Kavuu, a former senior manager at Standard Chartered Bank (K). It will be renamed NIC Capital Securities after NIC acquired 58% for 157 million shillings in 2007.
15. Standard Investment Bank: (no info online) Media reports that Mr. Amish Gupta will be in charge after leaving Renaissance early this year.
16. Sterling Investments: Stanley Ngaine (Chairman), John E. Kirimi, Ahmed S. Ndope, David Ithanya.
17. Suntra: James H R Murigu (MD), Nguru Wachira (Chairman), George Ongaya-Okoth, David Kinyua Waweru, Mr. Fred Ngatia.
Monday, May 19, 2008
Scangroup AGM
Excerpts from the 2008 Scangroup AGM, Q & A session held today at KICC.
top issues were dividend cheques and bonus shares
Misplaced shareholder cheques: The question was posed by Mr. Shah, who’s probably the second most famous public shareholder after Mr. A W Chami and who had waited for nine months for a dividend cheque error to be corrected, and was faced with bank charges of several hundred shillings for his efforts.
In response company said they were working to sort out shareholder cheque and unclaimed dividends issues
- Said the figure was now down to 3.2 million shillings. (which if unclaimed after a few years, will go to CMA)
- Passed some blame on to stockbrokers who have not reconciled some accounts since the IPO
- On cheques, they have an arrangement with their bankers (CFC), so customer could cash their cheques for free can (at the CFC upper hill branch)
- Said electronic (EFT) payments had not been successful because a lot of information provided by shareholders was wrong.
Bonus shares; several shareholders argued for bonus shares. Chairman replied times that – it was not the right time, they will cross that bridge when they get there, when they need to they will adjust their capital, will look at fund raising at that time (shares were not the only avenue available)
CSR company is weak; Chairman replied they are doing more this year including some work with IDP’s.
Marketing company that does not market! can the company do some advertising so it becomes well known?; CEO replied that they pitch to corporates and there’s not a marketing person in East Africa who is not aware of the company or its affiliates.
ESOP; It was good to have discussions at this AGM on the company’s employee share ownership plans (ESOP) – as CEO Bharat Thakar explained that the board had approved for 6 million shares a per year to be availed through the ESOP to key revenue drivers and to ensure that senior managers were very well incentivized. All managers get targets, which entitles them to some options at the end of the year. The Chairman added that that the shares were not free, were paid for by managers to the company and were priced on the date of acceptance i.e. market price. The report 2007 report noted that was ESOP set up under a trust deed in February 2008 but that no options have been granted so far, though shareholders have approved 15 million shares.
African ambition different shareholders challenged the board their ambition to be the biggest media buyer in Africa by 2010 when they (i) didn’t have the capital (ii) had dormant offices in Malawi, Mozambique, Zambia and Nigeria. The first shareholder was actually asking the company to give bonus shares/increase float (from the current 160 million shares, to at least 250m) while the CEO answered to the second - that all the offices were active, (except Nigeria) and were used for billing companies in those countries.
Cross listing one shareholder asked them to cross list as their market was also Uganda and Tanzania. Chairman said it would make sense at the right time, but it was also very expensive to do.
Super sleuth one eagle eyed shareholder pointed out, and the company confirmed the error; that the top ten shareholders (printed in the annual report) had 66, not 50% of the company shares
Goodies lunch offered, at KICC grounds, but no details.
top issues were dividend cheques and bonus shares
Misplaced shareholder cheques: The question was posed by Mr. Shah, who’s probably the second most famous public shareholder after Mr. A W Chami and who had waited for nine months for a dividend cheque error to be corrected, and was faced with bank charges of several hundred shillings for his efforts.
In response company said they were working to sort out shareholder cheque and unclaimed dividends issues
- Said the figure was now down to 3.2 million shillings. (which if unclaimed after a few years, will go to CMA)
- Passed some blame on to stockbrokers who have not reconciled some accounts since the IPO
- On cheques, they have an arrangement with their bankers (CFC), so customer could cash their cheques for free can (at the CFC upper hill branch)
- Said electronic (EFT) payments had not been successful because a lot of information provided by shareholders was wrong.
Bonus shares; several shareholders argued for bonus shares. Chairman replied times that – it was not the right time, they will cross that bridge when they get there, when they need to they will adjust their capital, will look at fund raising at that time (shares were not the only avenue available)
CSR company is weak; Chairman replied they are doing more this year including some work with IDP’s.
Marketing company that does not market! can the company do some advertising so it becomes well known?; CEO replied that they pitch to corporates and there’s not a marketing person in East Africa who is not aware of the company or its affiliates.
ESOP; It was good to have discussions at this AGM on the company’s employee share ownership plans (ESOP) – as CEO Bharat Thakar explained that the board had approved for 6 million shares a per year to be availed through the ESOP to key revenue drivers and to ensure that senior managers were very well incentivized. All managers get targets, which entitles them to some options at the end of the year. The Chairman added that that the shares were not free, were paid for by managers to the company and were priced on the date of acceptance i.e. market price. The report 2007 report noted that was ESOP set up under a trust deed in February 2008 but that no options have been granted so far, though shareholders have approved 15 million shares.
African ambition different shareholders challenged the board their ambition to be the biggest media buyer in Africa by 2010 when they (i) didn’t have the capital (ii) had dormant offices in Malawi, Mozambique, Zambia and Nigeria. The first shareholder was actually asking the company to give bonus shares/increase float (from the current 160 million shares, to at least 250m) while the CEO answered to the second - that all the offices were active, (except Nigeria) and were used for billing companies in those countries.
Cross listing one shareholder asked them to cross list as their market was also Uganda and Tanzania. Chairman said it would make sense at the right time, but it was also very expensive to do.
Super sleuth one eagle eyed shareholder pointed out, and the company confirmed the error; that the top ten shareholders (printed in the annual report) had 66, not 50% of the company shares
Goodies lunch offered, at KICC grounds, but no details.
Friday, May 16, 2008
Economic Stimulus Friday
This month US citizens get a second windfall cheque from President George W. Bush as economic stimulus cheques arrive in their mailboxes of at least $300 (~Kshs. 19,000) per person, and more for parents and guardians with children. (The first was after he pipped Al Gore to the presidency and came through with one his main campaign promises).
But they are being rewarded and banks cushioned largely because of blind/(dumb)real estate and investments decisions - buying houses & using up credit on borrowed cash of extending sub-prime finance in anticipation of even higher housing prices.
Kenyans went though a contested election and a period of post election violence, after they did their part and voted faithfully in the presidential election. 99% had no part in the election tallying or violence that followed or the stalemate that paralyzed the economy for two months.
But instead of a stimulus, we are coping with higher food, fuel, and transport prices that are only expected to get higher in the aftermath of rising oil prices, an expanded government, infrastructure repair projects, and the downturn of agricultural produce this year.
Instead of a stimulus, the Government has flatly refused to
lower petrol taxes (which may ease some of the burden on citizens and companies), and civil servants (government workers), are being asked to contribute financially to the resettlement of displaced Kenyans - a target figure has been arbitrarily set at Kshs. 30 billion ($485 million). It remains to be seen how much will be raised from citizens who were able to fork out over 80 billion shillings ($1.3 billion) in pursuit of the Safaricom IPO (and money for which the Government still holds)
So who needs a stimulus more?
But they are being rewarded and banks cushioned largely because of blind/(dumb)real estate and investments decisions - buying houses & using up credit on borrowed cash of extending sub-prime finance in anticipation of even higher housing prices.
Kenyans went though a contested election and a period of post election violence, after they did their part and voted faithfully in the presidential election. 99% had no part in the election tallying or violence that followed or the stalemate that paralyzed the economy for two months.
But instead of a stimulus, we are coping with higher food, fuel, and transport prices that are only expected to get higher in the aftermath of rising oil prices, an expanded government, infrastructure repair projects, and the downturn of agricultural produce this year.
Instead of a stimulus, the Government has flatly refused to
lower petrol taxes (which may ease some of the burden on citizens and companies), and civil servants (government workers), are being asked to contribute financially to the resettlement of displaced Kenyans - a target figure has been arbitrarily set at Kshs. 30 billion ($485 million). It remains to be seen how much will be raised from citizens who were able to fork out over 80 billion shillings ($1.3 billion) in pursuit of the Safaricom IPO (and money for which the Government still holds)
So who needs a stimulus more?
Wednesday, May 14, 2008
Business Brief's: May 15
S& L will provide housing finance for government civil servants: A rate of 5% over 18 years is unprecedented – but 600 million shillings means it will benefit as most 120 mid-tier admins going by the current housing prices.
Blue chip black eyes: It must be bad for employees of blue chip banks and companies in Nairobi like Barclays, Citi, AIG - to have to face the press and their peers while their parent companies are admitting bad sub-prime decisions, write-offs, layoffs and record losses.
Stockbroker charged: A rogue stockbroker finally arrested but given the inability to prosecute white collar crimes here, and the legal delays that lawyers are able to get their wealth clients, it may not bring much comfort to his former clients.
Cement shortage in Tanzania, is the 2010 World Cup to blame?
EA Aviation
(i) New A320 aircraft for Air Tanzania
(ii) Air Uganda now flies to Jo-Burg – so do any Ugandans still have to get up at 4 a.m. to route through KQ Nairobi?
(iii) What’s a KQ 737 doing in Amsterdam?
all photos from airliners.net
Also, the site get a lot of hits from people looking for jobs with Emirates thanks to a few posts over the years about the airline hiring cabin crew in Nairobi. But it's tough to get a job with Emirates, though they get 90 new flight attendants each week and former US pilots joining, they only hires about 5% of applicants.
Pan African media race
Nation Media Group whose vision is to be the 'media of Africa for Africans’ have launched a digital platform to satisfy subscribers (esp. in Diaspora) who want video and text online. They will combine their radio, print and video broadcasts while also welcoming citizen journalism ‘where viewers send in pictures and give understanding of events in their neighborhoods’ – according to their annual report, thsi will add to their revenues.
Businessman Chris Kirubi also has ambitious plans to expand his media network, and after bringing CNBC Africa to Nairobi this year , may next try to create a Capital platform like the Nation’s.
Economic signs
You know the economy is bad when;
- Your favorite bartender steals shamelessly from you and you celebrate his firing
- Previously ‘safe’ parking spots become vandalism spots
- Anyone traveling up-country is targeted with requests to buy cheap vegetables – but there are none available
- It takes a long time to fill a matatu in rush hour as many people are opting to walk
Economic Ying Yang;
- soft drinks EABL have a run away hit with their Alvaro (pear and pineapple juice), but KETEPA should probably have educated Kenyans on what ‘iced tea’ is before launching their new safari
- Money transferImperial Bank signed up with Moneygram, while Family bank and Housing Finance have just signed to become agents Safaricom’ M-Pesa.
Petrol prices finally hit 100 shillings ($1.62) a litre of K-Street, but at least you can still buy the same for 92/= in Ngara
Opportunities
- Barclays scholarships for mathematicians
- Yale Leadership Training Program seeks leaders of tomorrow
- Investment challenge for undergraduate university students to simulate NSE investments and win prizes and internships.
Blue chip black eyes: It must be bad for employees of blue chip banks and companies in Nairobi like Barclays, Citi, AIG - to have to face the press and their peers while their parent companies are admitting bad sub-prime decisions, write-offs, layoffs and record losses.
Stockbroker charged: A rogue stockbroker finally arrested but given the inability to prosecute white collar crimes here, and the legal delays that lawyers are able to get their wealth clients, it may not bring much comfort to his former clients.
Cement shortage in Tanzania, is the 2010 World Cup to blame?
EA Aviation
(i) New A320 aircraft for Air Tanzania
(ii) Air Uganda now flies to Jo-Burg – so do any Ugandans still have to get up at 4 a.m. to route through KQ Nairobi?
(iii) What’s a KQ 737 doing in Amsterdam?
all photos from airliners.net
Also, the site get a lot of hits from people looking for jobs with Emirates thanks to a few posts over the years about the airline hiring cabin crew in Nairobi. But it's tough to get a job with Emirates, though they get 90 new flight attendants each week and former US pilots joining, they only hires about 5% of applicants.
Pan African media race
Nation Media Group whose vision is to be the 'media of Africa for Africans’ have launched a digital platform to satisfy subscribers (esp. in Diaspora) who want video and text online. They will combine their radio, print and video broadcasts while also welcoming citizen journalism ‘where viewers send in pictures and give understanding of events in their neighborhoods’ – according to their annual report, thsi will add to their revenues.
Businessman Chris Kirubi also has ambitious plans to expand his media network, and after bringing CNBC Africa to Nairobi this year , may next try to create a Capital platform like the Nation’s.
Economic signs
You know the economy is bad when;
- Your favorite bartender steals shamelessly from you and you celebrate his firing
- Previously ‘safe’ parking spots become vandalism spots
- Anyone traveling up-country is targeted with requests to buy cheap vegetables – but there are none available
- It takes a long time to fill a matatu in rush hour as many people are opting to walk
Economic Ying Yang;
- soft drinks EABL have a run away hit with their Alvaro (pear and pineapple juice), but KETEPA should probably have educated Kenyans on what ‘iced tea’ is before launching their new safari
- Money transferImperial Bank signed up with Moneygram, while Family bank and Housing Finance have just signed to become agents Safaricom’ M-Pesa.
Petrol prices finally hit 100 shillings ($1.62) a litre of K-Street, but at least you can still buy the same for 92/= in Ngara
Opportunities
- Barclays scholarships for mathematicians
- Yale Leadership Training Program seeks leaders of tomorrow
- Investment challenge for undergraduate university students to simulate NSE investments and win prizes and internships.
Tuesday, May 13, 2008
Next CMA minefield
Employee share ownership plans (ESOP’s) are define by the CMA as unit trusts. They are ideal for high tech small companies, but when establish companies roll them out without clear rules, it’s a cause for legal concern, but more so for shareholders of these companies.
They make sense in high tech small companies who need to retain key employees (Access Kenya, Scangroup), but what does a large company like KCB, NMG and HFCK (who have all applied to set up ESOP’s) need them for? Equity Bank has had one for three years and when they listed in 2006 said they’d get CMA approval as soon as possible (yet to happen). If the company does well is it a collective effort and managers and staff should be rewarded with increases and bonuses from their existing contracts.
ESOP votes should not be pressed on unsuspecting shareholders without certain disclosures such as; whether shares will be bought from the public or allocated from the company, vesting rules and participation requirements, whether they are for company executives or non executives (which may be more palatable to shareholders) and trustee/management information of the ESOP?
As at April 2007, CMA licensed ESOP’s were 6: EABL, Kenol, Athi River Mining, Access Kenya, Scangroup and Safaricom.
They make sense in high tech small companies who need to retain key employees (Access Kenya, Scangroup), but what does a large company like KCB, NMG and HFCK (who have all applied to set up ESOP’s) need them for? Equity Bank has had one for three years and when they listed in 2006 said they’d get CMA approval as soon as possible (yet to happen). If the company does well is it a collective effort and managers and staff should be rewarded with increases and bonuses from their existing contracts.
ESOP votes should not be pressed on unsuspecting shareholders without certain disclosures such as; whether shares will be bought from the public or allocated from the company, vesting rules and participation requirements, whether they are for company executives or non executives (which may be more palatable to shareholders) and trustee/management information of the ESOP?
As at April 2007, CMA licensed ESOP’s were 6: EABL, Kenol, Athi River Mining, Access Kenya, Scangroup and Safaricom.
Wanted
A breakdown on all NSE share splits from 2000, with dates and split prices
Things we don’t have in Kenya but may be nice to have at the NSE
- Short selling; there are some stocks I’d love to short
- Automatic Dividend reinvestment programs (DRIP’s), why don’t more companies push for these as they push for ESOP’s?
- Share buy back programs: someone to buy my Uchumi?
Things that should go away
- Cum dividend: It is criminal that a company can declare a dividend in January to pay in June. Declare a dividend, close the books within a month and pay the day after the AGM please.
Things we don’t have in Kenya but may be nice to have at the NSE
- Short selling; there are some stocks I’d love to short
- Automatic Dividend reinvestment programs (DRIP’s), why don’t more companies push for these as they push for ESOP’s?
- Share buy back programs: someone to buy my Uchumi?
Things that should go away
- Cum dividend: It is criminal that a company can declare a dividend in January to pay in June. Declare a dividend, close the books within a month and pay the day after the AGM please.
Friday, May 09, 2008
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 its 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.
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.
Thursday, May 08, 2008
Access Kenya AGM
Access Kenya (AK) held its first AGM since listing on the Nairobi stock exchange (NSE). Here in alphabetical order is a brief recap.
Most of the questions were answered by Chairman Michael Somen and Executive director David Somen
Accounts: there were two balance sheets and P&L’s in the accounts which caused some confusion, but it was explained that one set was audited while the other was included to guide shareholders on the position of the company taking into account recent consolidations (Openview was acquired).
Blogger moment; as I was finishing my lunch, executive director David Somen was greeting shareholders and charring so I asked him about the company’s prospects: He said it's a good for investors and that AK was the second best performing share on the NSE after Equity Bank. On acquisitions he added that Kenya was not easy as most of the ISP’s of significance were not local entities, so they may look regionally for growth.
Collapsed brokers: two shareholders raised the matter of shares being sold without owners consent at different times - but each time, the chairman deferred them since they did not relate to AK shares
Computing industry one shareholder complained that the AK report was scanty on the industry (computing, ISP, technology etc.) and that the company should in future incorporate a management report on their performance in the industry. The chairman said that would be done.
Directors’ fees: while one shareholder considered it quite large, directors replied that they had actually reduced the fees 20 million from 50 million shillings before to be in line with other listed companies.
Dividend one shareholder complained that it was not enough and the company had undertaken too many corporate social responsibility (CSR) activities, diluting the dividend. The question got a lot of applause and the Chairman said they would take that into consideration in future (heavy CSR was also an issue at Standard Chartered AGM a few years ago). Another shareholder noted a dividend current liability amount, which the directors indicated was a payment owed to the directors of the company they acquired after the year end (Openview?)
Extraordinary votes
Increase share capital: from 250 million to 500 million this would give the company room to maneuver in terms of acquisitions, bonus, share splits. In answer to another shareholder, D. Somen clarified the CMA/NSE approval was not required to increase the share sin a company, but only at the time of listing
Acquire companies: up to 200 million shillings. Directors clarified that the companies falling under this clause were rather small, none larger than 5% of AK’s worth, and it would not be prudent to call an EGM (costing 1 million to 3 million shillings and several weeks time) each time this happened. Following other questions about due diligence, target companies and costs, the directors assured shareholders that all decisions would be made with a view to maximizing shareholder value and they would inform shareholders fully about acquisitions. The increased share capital would enable them to take on new shareholders whose companies they acquired. They have talked to several, but not ready to sign any deals yet
ESOP; vote to allocate new shares (about 1.35%) to the employee share ownership plans (ESOP). directors explained that it would enable them to maintain their unparalleled staff retention in the industry and that all 250 employees were shareholders which improved their commitment to the company. D. Somen explained a bit about the scheme which options were exercised over several years and ensured employees stayed on to reap the maximum from AK. This week the Nation Media Group announce plans to create an ESOP – that would be about the 3rd largest shareholder in the company, its time more oversight was given to the professional investment management of ESOP’s
Goodies: tote bag with cap, notepad and access Kenya pen. Lunch box from the Stanley hotel (beef sandwich, apple, orange, piece of chicken, Keringet bottle, soda)
Post election violence directors reiterated that they did not expected the early 2008 events to have an impact on the company’s outlook for the year which the anticipated to be 50% - 60% growth
Venue: was the Nairobi Arboretum and I heard many shareholders complain about its (i) inaccessibility – not public transport/or shuttle organized by company (ii) no directions - once they found the ‘park’, it was vast forest with no indication as to which corner the event was being held
Verdict: apart from the location, was a nice first outing for a newly listed company. It pays to have a strong chairman, able company secretary (Fiona Fox who is leaving the company after the AGM) and directors who can readily and confidently answer questions put to them by shareholders – 70% of which are mundane and/or repeated at every other AGM.
Most of the questions were answered by Chairman Michael Somen and Executive director David Somen
Accounts: there were two balance sheets and P&L’s in the accounts which caused some confusion, but it was explained that one set was audited while the other was included to guide shareholders on the position of the company taking into account recent consolidations (Openview was acquired).
Blogger moment; as I was finishing my lunch, executive director David Somen was greeting shareholders and charring so I asked him about the company’s prospects: He said it's a good for investors and that AK was the second best performing share on the NSE after Equity Bank. On acquisitions he added that Kenya was not easy as most of the ISP’s of significance were not local entities, so they may look regionally for growth.
Collapsed brokers: two shareholders raised the matter of shares being sold without owners consent at different times - but each time, the chairman deferred them since they did not relate to AK shares
Computing industry one shareholder complained that the AK report was scanty on the industry (computing, ISP, technology etc.) and that the company should in future incorporate a management report on their performance in the industry. The chairman said that would be done.
Directors’ fees: while one shareholder considered it quite large, directors replied that they had actually reduced the fees 20 million from 50 million shillings before to be in line with other listed companies.
Dividend one shareholder complained that it was not enough and the company had undertaken too many corporate social responsibility (CSR) activities, diluting the dividend. The question got a lot of applause and the Chairman said they would take that into consideration in future (heavy CSR was also an issue at Standard Chartered AGM a few years ago). Another shareholder noted a dividend current liability amount, which the directors indicated was a payment owed to the directors of the company they acquired after the year end (Openview?)
Extraordinary votes
Increase share capital: from 250 million to 500 million this would give the company room to maneuver in terms of acquisitions, bonus, share splits. In answer to another shareholder, D. Somen clarified the CMA/NSE approval was not required to increase the share sin a company, but only at the time of listing
Acquire companies: up to 200 million shillings. Directors clarified that the companies falling under this clause were rather small, none larger than 5% of AK’s worth, and it would not be prudent to call an EGM (costing 1 million to 3 million shillings and several weeks time) each time this happened. Following other questions about due diligence, target companies and costs, the directors assured shareholders that all decisions would be made with a view to maximizing shareholder value and they would inform shareholders fully about acquisitions. The increased share capital would enable them to take on new shareholders whose companies they acquired. They have talked to several, but not ready to sign any deals yet
ESOP; vote to allocate new shares (about 1.35%) to the employee share ownership plans (ESOP). directors explained that it would enable them to maintain their unparalleled staff retention in the industry and that all 250 employees were shareholders which improved their commitment to the company. D. Somen explained a bit about the scheme which options were exercised over several years and ensured employees stayed on to reap the maximum from AK. This week the Nation Media Group announce plans to create an ESOP – that would be about the 3rd largest shareholder in the company, its time more oversight was given to the professional investment management of ESOP’s
Goodies: tote bag with cap, notepad and access Kenya pen. Lunch box from the Stanley hotel (beef sandwich, apple, orange, piece of chicken, Keringet bottle, soda)
Post election violence directors reiterated that they did not expected the early 2008 events to have an impact on the company’s outlook for the year which the anticipated to be 50% - 60% growth
Venue: was the Nairobi Arboretum and I heard many shareholders complain about its (i) inaccessibility – not public transport/or shuttle organized by company (ii) no directions - once they found the ‘park’, it was vast forest with no indication as to which corner the event was being held
Verdict: apart from the location, was a nice first outing for a newly listed company. It pays to have a strong chairman, able company secretary (Fiona Fox who is leaving the company after the AGM) and directors who can readily and confidently answer questions put to them by shareholders – 70% of which are mundane and/or repeated at every other AGM.
Tuesday, May 06, 2008
Celtel Zambia: Prospectus Peek
After taking a peek at Safaricom prospectus, take a look at the Celtel Zambia one (Thanks M for mailing it in) with two weeks to go in the calendar.
January 2008, showed that cross-border diversification may not be a bad thing, even for Kenyans - and if you have the money and the chance, you should do it. Stanbic Uganda has performed quite well, though the weakening Uganda shilling eats into improved dividends.
In this IPO, retail investors from outside Zambia are not included, nor are there provisions for other country nationals except as international institutional investors. For Kenyans who take part, we are one of the countries who have double tax treaties with Zambia – hence reduced tax on dividends. However Celtel has never paid dividends as it has ploughed back all profits into operations.
Comparing mobile giants: it’s best to compare Celtel Zambia to Safaricom Kenya as they are both market leaders and backed by multinational mobile partners. Zambia is larger than Kenya, but with about 1/3 of the population (12 million) Celtel Zambia has about 1.9m customers representing 78% market share and covers 71% of the country (Cell Z and MTN are competitors). It had 2007 revenue of $252 million and an average monthly ARPU of $13 - similar to Safaricom’s (~800 shillings per month).
Beneficiaries: While the benefits of safcom went to the Kenya government, the benefits of this (sale of 20%) will go to Celtel parent. Stanbic bank are also going to do well as lead manager, distribution agents and one of the receiving banks. IFC owns 10% of the company and is expected to sell its shares after the IPO which itself costs about $5 million.
On offer: 1 billion shares on offer at 640 kwacha per share ($0.18 or Kshs. 11.50). The minimum subscription is 700 shares (about 8,000 shillings). Employees get a 20% discount on the price.
Directors: A Kenyan connection is former PS (part of 1990's dream team) and IFC executive Mwaghazi Mwachofi on the board of Celtel. It is refreshing got see that all directors other portfolios are listed in teh prospectus and that they have to declare that they have not censured/criticized by any regulator/ authority or been involved in bankruptcy, or liquidation.
Management fees: The company pays between 3.6% and 4.8% of annual revenue to Zain/Celtel parent. Safaricom pays Vodafone 0.5% of revenue and 6% of procurement costs as what has been a sensitive issue for the company but seems to be the norm with multi-nationals.
Stock exchange not retail or liquid: Zambian exchange appears not to be very liquid – it has 9 listed companies worth $100m, and $72m worth of deals were done last year in just 6,196 trades. The listing of Celtel should improve those numbers.
January 2008, showed that cross-border diversification may not be a bad thing, even for Kenyans - and if you have the money and the chance, you should do it. Stanbic Uganda has performed quite well, though the weakening Uganda shilling eats into improved dividends.
In this IPO, retail investors from outside Zambia are not included, nor are there provisions for other country nationals except as international institutional investors. For Kenyans who take part, we are one of the countries who have double tax treaties with Zambia – hence reduced tax on dividends. However Celtel has never paid dividends as it has ploughed back all profits into operations.
Comparing mobile giants: it’s best to compare Celtel Zambia to Safaricom Kenya as they are both market leaders and backed by multinational mobile partners. Zambia is larger than Kenya, but with about 1/3 of the population (12 million) Celtel Zambia has about 1.9m customers representing 78% market share and covers 71% of the country (Cell Z and MTN are competitors). It had 2007 revenue of $252 million and an average monthly ARPU of $13 - similar to Safaricom’s (~800 shillings per month).
Beneficiaries: While the benefits of safcom went to the Kenya government, the benefits of this (sale of 20%) will go to Celtel parent. Stanbic bank are also going to do well as lead manager, distribution agents and one of the receiving banks. IFC owns 10% of the company and is expected to sell its shares after the IPO which itself costs about $5 million.
On offer: 1 billion shares on offer at 640 kwacha per share ($0.18 or Kshs. 11.50). The minimum subscription is 700 shares (about 8,000 shillings). Employees get a 20% discount on the price.
Directors: A Kenyan connection is former PS (part of 1990's dream team) and IFC executive Mwaghazi Mwachofi on the board of Celtel. It is refreshing got see that all directors other portfolios are listed in teh prospectus and that they have to declare that they have not censured/criticized by any regulator/ authority or been involved in bankruptcy, or liquidation.
Management fees: The company pays between 3.6% and 4.8% of annual revenue to Zain/Celtel parent. Safaricom pays Vodafone 0.5% of revenue and 6% of procurement costs as what has been a sensitive issue for the company but seems to be the norm with multi-nationals.
Stock exchange not retail or liquid: Zambian exchange appears not to be very liquid – it has 9 listed companies worth $100m, and $72m worth of deals were done last year in just 6,196 trades. The listing of Celtel should improve those numbers.
Looking Back: Annual reports
I found the annual accounts for Total East Africa (now Total Kenya) for the year 1990 and tried to compare the changes over the years. This is important as companies with over a hundred thousand shareholders (Eveready, Safaricom) will be considering cutting their costs soon until they are able to use e-mail for distribution.
comparing the 1990 and 2006 annual reports from Total
size: 1990: 20 pages, black & white, no pictures, heavy envelope paper
2006: 48 pages, glossy paper, all colour, lots of pictures
Financials: 1990 profit & loss (appears on page. 8), balance sheet (p.9), cash flow (p.10) followed by notes 11 – 15 (13 notes) – showing turnover of 3.1 billion shillings and pre tax profit of 237 million.
2006 P&L (appears on p.25), balance sheet (p.26), cash flow (p.27), followed by note page 29 – 44 (32 notes) - showing turnover or 38.0 billion shillings, and pre tax profit of 677 million.
shareholding: 13.7m ordinary shares 6/= dividend [total dividend of 84 million]
173m ordinary shares 2.50 dividend [total dividend of 435 million]
Chairman's statement
1990 ½ page
2006 4 pages
Auditors statement: 1990 - Murdoch, McCrae & smith; they issued a 1 page statement with two paragraphs, saying they examined books, and they are true in their opinion.
2006 Deloitte & Touché: 1 page statement with 6 paragraphs; explaining directors’ responsibility, auditors’ role, audit process, and finally their opinion that the accounts are true.
Other Formatting: what’s missing from 1990, that’s found in 2006? shareholder profile (p.22) mission & ,vision (p.2), directors bios & photos (2 pages), picture of key managers (1 page), management report (5 pages), company profile (4 pages), corporate social responsibility and adverting messages.
verdict: companies like Eveready can cut back on the ‘filler’ and give an annual report with just the basics to cut the postage cost in ½. Last year they issued a small size report that was short on ‘filler’ but financial, regulatory and governance changes have also contributed to the increasing size of corporate reports and resultant shareholder costs.
comparing the 1990 and 2006 annual reports from Total
size: 1990: 20 pages, black & white, no pictures, heavy envelope paper
2006: 48 pages, glossy paper, all colour, lots of pictures
Financials: 1990 profit & loss (appears on page. 8), balance sheet (p.9), cash flow (p.10) followed by notes 11 – 15 (13 notes) – showing turnover of 3.1 billion shillings and pre tax profit of 237 million.
2006 P&L (appears on p.25), balance sheet (p.26), cash flow (p.27), followed by note page 29 – 44 (32 notes) - showing turnover or 38.0 billion shillings, and pre tax profit of 677 million.
shareholding: 13.7m ordinary shares 6/= dividend [total dividend of 84 million]
173m ordinary shares 2.50 dividend [total dividend of 435 million]
Chairman's statement
1990 ½ page
2006 4 pages
Auditors statement: 1990 - Murdoch, McCrae & smith; they issued a 1 page statement with two paragraphs, saying they examined books, and they are true in their opinion.
2006 Deloitte & Touché: 1 page statement with 6 paragraphs; explaining directors’ responsibility, auditors’ role, audit process, and finally their opinion that the accounts are true.
Other Formatting: what’s missing from 1990, that’s found in 2006? shareholder profile (p.22) mission & ,vision (p.2), directors bios & photos (2 pages), picture of key managers (1 page), management report (5 pages), company profile (4 pages), corporate social responsibility and adverting messages.
verdict: companies like Eveready can cut back on the ‘filler’ and give an annual report with just the basics to cut the postage cost in ½. Last year they issued a small size report that was short on ‘filler’ but financial, regulatory and governance changes have also contributed to the increasing size of corporate reports and resultant shareholder costs.
Saturday, May 03, 2008
Regional banks and dueling websites
Diamond Trust Bank will this month ask their to approve
- participation of the bank in a rights issue of their Ugandan subsidiary
- Approve expansion to Burundi (odd or smart considering that other banks have focused on Rwanda)
dueling web sites
DTB new corp name have a new website but they should probably map /discontinue their old site or it may give the impression that its another company that doesn’t bother to update its website.
KCB who are also going to increase their capital to support regional expansion, and cross listing on the stock exchanges in Tanzania and Uganda, have consolidated their company to a group website, abandoning their kcb.co.ke
Also caught up in the confusion of domains between (.co.ke) and (.com) is the Safaricom IPO. The former is the official site, which applicants could use to apply online for shares. The government should have cracked down on transaction adviser - Dyer & Blair who opened the latter site and may have created some confusion. Though more active and up to date (even has a blog of sorts), the Dyer site attracted people who thought it was the official site and some confused investors have been logging in their to track their applications without realizing that it is not the official site
- participation of the bank in a rights issue of their Ugandan subsidiary
- Approve expansion to Burundi (odd or smart considering that other banks have focused on Rwanda)
dueling web sites
DTB new corp name have a new website but they should probably map /discontinue their old site or it may give the impression that its another company that doesn’t bother to update its website.
KCB who are also going to increase their capital to support regional expansion, and cross listing on the stock exchanges in Tanzania and Uganda, have consolidated their company to a group website, abandoning their kcb.co.ke
Also caught up in the confusion of domains between (.co.ke) and (.com) is the Safaricom IPO. The former is the official site, which applicants could use to apply online for shares. The government should have cracked down on transaction adviser - Dyer & Blair who opened the latter site and may have created some confusion. Though more active and up to date (even has a blog of sorts), the Dyer site attracted people who thought it was the official site and some confused investors have been logging in their to track their applications without realizing that it is not the official site
Friday, May 02, 2008
CMA gets teeth
After taking a public beating from almost everybody in the country (from the President down to school kids) the Capital markets Authority (CMA) has decided to announce how it will bite back with a raft of new proposals posted at its website
- Raises stockbroker share capital to 50 million shillings (~$800,000) from the current 5 million, while that of investment banks goes up to 250 million
- Bars people who have been convicted of an economic crime from being brokers - But since no one gets convicted of economic crimes in Kenya, how about being associated with a collapsed firm? The new law says anyone who previously worked at another firm must get clearance from the former (but what if it collapsed?).
- owner/ managers: Owners cant be day to day managers, and no one can own more than 25% of a broker/i-bank
- Brokers must also maintain lists of employees and keep better records absolutely!
- best of all they must publish half yearly financial results in the newspapers, and also get insurance cover equivalent to 5 x their daily turnover (good luck with that),
and some indigestion perhaps
But the CMA also gives itself a lot of work to do, and which it may not be able to keep up with:
- Brokers can't close office / or open one without notifying CMA
- brokers must report any overdrawn customer account within 24 hours
- Brokers will forward monthly accounts, and quarterly portfolio reports to CMA.
Also
- Investor compensation fund is now a CDS compensation fund (what’s that, and who runs it?)
- muzzles agents; agents can’t work for more than one broker
Other
- sad news: today's fatal plane crash in S. Sudan has a Kenyan connection
- New stockbroker is an old one renamed according to the business daily; some name changes work, others don’t
- Raises stockbroker share capital to 50 million shillings (~$800,000) from the current 5 million, while that of investment banks goes up to 250 million
- Bars people who have been convicted of an economic crime from being brokers - But since no one gets convicted of economic crimes in Kenya, how about being associated with a collapsed firm? The new law says anyone who previously worked at another firm must get clearance from the former (but what if it collapsed?).
- owner/ managers: Owners cant be day to day managers, and no one can own more than 25% of a broker/i-bank
- Brokers must also maintain lists of employees and keep better records absolutely!
- best of all they must publish half yearly financial results in the newspapers, and also get insurance cover equivalent to 5 x their daily turnover (good luck with that),
and some indigestion perhaps
But the CMA also gives itself a lot of work to do, and which it may not be able to keep up with:
- Brokers can't close office / or open one without notifying CMA
- brokers must report any overdrawn customer account within 24 hours
- Brokers will forward monthly accounts, and quarterly portfolio reports to CMA.
Also
- Investor compensation fund is now a CDS compensation fund (what’s that, and who runs it?)
- muzzles agents; agents can’t work for more than one broker
Other
- sad news: today's fatal plane crash in S. Sudan has a Kenyan connection
- New stockbroker is an old one renamed according to the business daily; some name changes work, others don’t
New media stocks at the NSE
Until Safaricom gets listed later this year, take a glance at Access Kenya and Scangroup - two recently listed, new media companies at the NSE. They both say they are market leaders (none of their competitors are listed), both set out to increase market share organically and by acquisitions, and their shares cost about 30 shillings ($0.48) each, three times their IPO prices.
This month, Access Kenya are gearing up for their first AGM since their 2007 listing, while Scangroup will be having their second; and while Scangroup (SG) will have a vanilla AGM (no special business), Access Kenya (AK) have a lot more going on as they will seek approval from their shareholders to;
- double their authorized share capital from 250 million to 500 million shillings (500m shares) [giving them capacity to acquire companies, split shares, or raise capital in future]
- allow the board of directors to acquire companies up to 200 million shillings (~$3 million) without having to call for an expensive extraordinary general meeting of shareholders
- allocate more shares for the company’s ESOP (employee share ownership plan)
How else do the two companies stack up?
vision:
SG vision - to be the leading marketing services company in Africa by 2010
AK vision - be the premier provider of high quality internet and other technology services to corporate and high end residential customers
shareholders : SG 44,193 ; AK 29,434 shareholders
2007 performance
SG: turnover of 4.7 billion, profit of 353 million, cash generated 165 million, assets of 900 million. EPS 1.48 and a dividend of 0.90.
AK: turnover of 882 million, profit of 171m (dividend of 0.30), cash generated of 133m, assets of 748 million (had 600m in cash, much of it unutilized from the IPO). They also have separate consolidated accounts that include the financials of Openview business systems which was acquired after the IPO.
Employee Retention key for new media companies:
SG: ESOP approval of 15m of the company's 160m ordinary shares. Staff costs were 561m including 7m to directors and key managers.
AK: ESOP that had 7.25m shares of 203m ordinary shares has been exhausted and another 2.75 to be added this year. Staff costs of 131m including 53m to key managers and directors,
Other
SG: Has a lot of subsidiaries, from acquiring customers and competitors whcih is part of their strategy. 64% of their revenue was from Kenya with the rest from Uganda and Tanzania. Their CEO was on CNBC Africa TV last month saying their focus the year would be expansions to Zambia, Ghana, Mozambique, and Angola – probably by securing contracts with mobile phone companies in those countries.
AK: was charged a management fee of 52 million shillings by subsidiary companies (shades of Sameer group companies?).
Also Access Kenya’s annual report is heavy on the marketing side with a special offer for shareholders to apply for Access Home - the fastest guaranteed residential broadband(Nairobi and Mombasa) for Kshs. 6,000 + VAT per month - a 20% discount for shareholders. One time costs include 8,500 installation and equipment of 25,000 (and VAT, though I thought all computers equipment was VAT free). An added extra for shareholders is that the package which (including 1st month) costs a total of Kshs. 45,820 (~$725) can be financed with an Equity Bank 1-year loan (but monthly repayments of 4,391 work the loan out to cost about 25%) – the offer runs till end of May , and installation to be done in June & July.
This month, Access Kenya are gearing up for their first AGM since their 2007 listing, while Scangroup will be having their second; and while Scangroup (SG) will have a vanilla AGM (no special business), Access Kenya (AK) have a lot more going on as they will seek approval from their shareholders to;
- double their authorized share capital from 250 million to 500 million shillings (500m shares) [giving them capacity to acquire companies, split shares, or raise capital in future]
- allow the board of directors to acquire companies up to 200 million shillings (~$3 million) without having to call for an expensive extraordinary general meeting of shareholders
- allocate more shares for the company’s ESOP (employee share ownership plan)
How else do the two companies stack up?
vision:
SG vision - to be the leading marketing services company in Africa by 2010
AK vision - be the premier provider of high quality internet and other technology services to corporate and high end residential customers
shareholders : SG 44,193 ; AK 29,434 shareholders
2007 performance
SG: turnover of 4.7 billion, profit of 353 million, cash generated 165 million, assets of 900 million. EPS 1.48 and a dividend of 0.90.
AK: turnover of 882 million, profit of 171m (dividend of 0.30), cash generated of 133m, assets of 748 million (had 600m in cash, much of it unutilized from the IPO). They also have separate consolidated accounts that include the financials of Openview business systems which was acquired after the IPO.
Employee Retention key for new media companies:
SG: ESOP approval of 15m of the company's 160m ordinary shares. Staff costs were 561m including 7m to directors and key managers.
AK: ESOP that had 7.25m shares of 203m ordinary shares has been exhausted and another 2.75 to be added this year. Staff costs of 131m including 53m to key managers and directors,
Other
SG: Has a lot of subsidiaries, from acquiring customers and competitors whcih is part of their strategy. 64% of their revenue was from Kenya with the rest from Uganda and Tanzania. Their CEO was on CNBC Africa TV last month saying their focus the year would be expansions to Zambia, Ghana, Mozambique, and Angola – probably by securing contracts with mobile phone companies in those countries.
AK: was charged a management fee of 52 million shillings by subsidiary companies (shades of Sameer group companies?).
Also Access Kenya’s annual report is heavy on the marketing side with a special offer for shareholders to apply for Access Home - the fastest guaranteed residential broadband(Nairobi and Mombasa) for Kshs. 6,000 + VAT per month - a 20% discount for shareholders. One time costs include 8,500 installation and equipment of 25,000 (and VAT, though I thought all computers equipment was VAT free). An added extra for shareholders is that the package which (including 1st month) costs a total of Kshs. 45,820 (~$725) can be financed with an Equity Bank 1-year loan (but monthly repayments of 4,391 work the loan out to cost about 25%) – the offer runs till end of May , and installation to be done in June & July.
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