THE HORN IN LONGHORN PUBLISHERS 2017 YEAR

The average corporate annual report provides good opportunity for organisations to blow their own but not all companies usually have good news to project.

Kenya's Longhorn Publishers PLC had something to blow its horn over in 2017 year ended last June: The fine mix of innovation and good cost control.

But for these two factors,  the year would have ended badly. 

Firstly, total income had shrunk by 9.5% to Kes 1454.15 m as core income went down by 9.46% to Kes 1451.8m and income from other sources dropped by 27.9% to N2.35m.

Secondly, direct cost refused to drop as fast as core income going down by only 6.14% to Kes 702.2m.

Add to these 110% growth in finance cost to Kes 52.5m and you have looming disaster especially since the revenue drop was due to change in the curriculum of the main market: Kenya.

Disaster was averted because distribution cost and administration expenses both went down by double digit and Longhorn diversified into e learning which turned to open new vistas beyond Kenya 

Distribution cost dropped by 12.8% to Kes 169.4m and administration expenses closed the year at Kes 350.8m, 12.3% down.

The branch off into e learning helped to increase the contribution of business outside Kenya to revenue to 30% from 20% in 2016 and that looks like the tip of the floating ice berg.

Longhorn has to watch its liquidity more closely though and also find ways to ensure that cost of sale which normally is far more directly related to sales gets more effectively related.

Meanwhile, when shareholders meet in December, recommended Kes 0.29 final dividend per share easily sail through since it was well earned.

LONGHORN PUBLISHERS: Kes m, Full yr
                                  2017.             2016
Total income.        1454.15.       1606.76
Core revenue         1451.8.          1603.5
Cost of sale.            702.2.             748.1
Gross profit.            749.6.             755.4
Other income.             2.35.               3.26
Distribution cost.    169.4.             194.3
Administration.       350.8.             400.1
Operating profit      231.1.              164.3
Finance cost.            52.5.                 25.0
Profit before tax.    179.1.              139.3
Profit margin %.       12.3.                 8.67

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