Standard Group pre-tax profit jumps 8 per cent
By Jackson Okoth | March 14th 2015
The Standard Group posted positive results despite a challenging business environment in the last financial year. The Group made a pre-tax profit of Sh326 million for the financial year ended December 31, 2014; an 8 per cent increase from the previous year.
The Group achieved a turnover of Sh4.8 billion in 2014, maintaining the same turnover level as 2013. The media firm attributed this performance to the print, television and radio advertising streams that saw a growth of 8 per cent, 6 per cent and 66 per cent, respectively.
This financial performance is seen against the background of reduced Government spend on advertising, uncertainty surrounding digital television migration and negative impact of changing demographics on circulation. The firm saw better bottom line due to efficient management of direct costs through the use of automation and better technologies.
“This performance was as a result of initiatives by management to improve process controls through automation, thereby strengthening the control environment, as well as cost management to ensure improved efficiencies in the running of the business,” said the Board of Directors, in a statement signed by Mr Ronald Lubya, the Group’s Company Secretary.
The publisher of Kenya’s oldest and second-largest daily paper, The Standard, and operator of Radio Maisha and KTN television, said that newsprint prices globally have been on the decline and prudent cost management has had a positive impact on the cost of production for the print business.
Radio Maisha continued to grow both in listenership and reach which is the result of investments by the Group in new transmission sites and is now ranked position three, up from five, in the latest radio research rankings. The radio arm has been on an aggressive expansion mode, including transmission infrastructure and marketing drives such as road shows, to increase both transmission reach and grow audience numbers.
The digital platform, www.standardmedia.co.ke, on the other hand continued its leadership in this area as the biggest news site in East and Central African region, with growth in revenues of 37 per cent in 2014.
Despite the uncertainty surrounding digital television migration at the start of 2014, KTN registered impressive performance in 2014.
The Board announced that the Standard Group has partnered with other media houses to invest in digital distribution infrastructure so as to carry their own content and expand television offering beyond the existing channels.
Going forward, the Group will seek partnerships to pursue pay television business.
In terms of operations, the firm commenced significant investment in business automation in 2014, aimed at creating efficiencies to spur growth and assure sustainable growth.
In its outlook, the Standard Group said it was looking to tap into the upbeat economic growth forecast to spur business growth. The Group is putting in place measures to grow print business in alternative sectors in 2015 to bridge the gap that may be created by the government move to shift advertising spend from the print media to digital platforms.
“The Board is optimistic that with the strengthening of the economy, business should grow, though caution should be exercised due to the current challenges surrounding television and newspaper advertising,” the Board said in the statement released yesterday.
The firm will pay a final dividend of Sh0.50 per share for the year 2014, subject to withholding tax where applicable and shareholders’ approval at the Annual General Meeting to be held on May 29, 2015.
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