By JAMES ANYANZWA and NJIRAINI MUCHIRA

Shareholders of the Standard Group have applauded the significant growth achieved by the company in recent years and called on the management to put in place measures to sustain the momentum.

The shareholders, who were speaking during the company’s 94th Annual General Meeting (AGM) at the Standard Group Centre, noted the steady growth that has seen turnover increase from Sh1.9 billion in 2005 to Sh3.5 billion last year is a sign that the company is on the right path.

“The company has recorded promising growth. As shareholders, we expect more growth this year particularly being an election year,” said Nzau Jones, a shareholder.

However, the shareholders called on the management to direct extra energy on the broadcast division of the Group, in light of a difficult operating environment last year.

 

Strategic growth

“It will not be business as usual on the broadcast side because we cannot allow one side of the business to undermine the other,” Group Deputy Chairman and Chief Executive Paul Melly assured shareholders.

“We are making efforts to grow the various segments of the business despite operating in an environment marked by high interest rates and increasing competition,” he said.

Melly said the high interest rates were undermining the ability of companies to meet their financing obligations, and called on the Central Bank of Kenya (CBK) to consider lowering the level of interest rates to avoid increased incidences of default.

“The exchange rate has stabilised and inflation has come down. We now expect the CBK to ease pressure on interest rates by reducing the lending rate. Anything short of this will undermine economic growth.”

During the AGM, the shareholders approved a bonus issue of one share for every 10 held. This will enhance the capacity of shareholders to profit from increased future dividends and improved cash flow from those willing to liquidate their positions.

The issuance of additional shares will also help the Group grow its capital base by Sh37.1 million to cushion against a limiting environment and investment commitments.

The Group’s shares climbed 3.23 per cent at the close of yesterday’s trading session to Sh24 from the previous day’s Sh23.25 at the Nairobi Securities Exchange. 

“The company has made tremendous progress over the last seven years and this has not gone unnoticed. The purpose of the additional shares is to enhance shareholder value,” Melly told shareholders.

Two directors, Ms Zehrabanu Janmohamed and Mr Sarvjeet Channa, were re-elected to the board for another term. The shareholders also endorsed the amendment to the Memorandum and Articles of Association of the company in line with advancements in laws, technology and international best practice. 

Melly urged shareholders to support the company and ensure the business thrives even through the most difficult times.

Over the past year, the shareholders were informed of measures taken to grow the business.

These include the re-launch of The County Edition, a newspaper that covers issues about the counties and a revamped Online platform dubbed the Standard Digital World (www.standardmedia.co.ke).

Standard Group Chairman Robin Sewell said the strategic decision to revamp the digital segment was informed by market dynamics and need to reach a wider audience.

“Digital will have a major impact on our audience, especially in this new electronic age,” he said.  

The Group defied a harsh environment to perk up it’s revenues marginally to Sh3.17 billion in 2011 compared to Sh3.10 billion in 2010.

Profit after tax attributable to equity holders of the parent company reduced to Sh219 million from Sh249 million in 2010.

However, the Group’s financial base continued to strengthen, with total assets now standing at Sh3.51 billion while shareholders’ equity stood at Sh1.6 billion.

Over the past three years, the Standard Group has invested in excess of Sh1.5 billion in infrastructure and equipment meant to converge operations to gain from synergies offered by a multimedia environment.