LONGHORN PUBLISHERS: HORN BLOWING AHEAD

It looks certain that Kenya's Longhorn Publishers plc will end the current financial year well enough to blow some horn in celebration.

According to half year figures to December 2018 released this week and signed by Group Chairman, Hon E T Nyammo, profit before tax is growing well ahead of turnover thanks to improved efficiency and market opportunities.

Sales for the half year came to Ksh 697.565m, up 35.9% on Ksh 513.460m at the same time in 2017. 

However, cost of sale grew by 41.9% to Ksh 271.041m from Ksh 191.059m resulting in lower 32.3% growth in gross profit to Ksh 426.524m from Ksh 322.401m.

It was this stranglehold that good control over operating costs and new opportunities in regional markets reversed into higher growth in profit before tax.

According to the figures, operating expenses grew by 24.4% to Ksh 336.339m from Ksh 270.310m leading to 73.8% leap in profit before tax to Ksh90.195m from Ksh 52.091m.

The good news, says Hon Nyammo stemmed from improved efficiency, growth of business in Kenya and regional markets in East Africa including sale of publishing rights with higher margins.

In the end, Longhorn ended the half year with higher double digit profit margin (12.9%) compared to the fringe type of 10.1% recorded by December 2017.

And the second half could even make things better, adds the Chair. The expectation is that supply of competency based curriculum materials and dividends of digital technology embrace will contribute to more growth and higher margins.

In other words, with continued cooperation with the Kenyan government and growth in regional markets in Rwanda, Uganda, Tanzania, Malawi and Zambia, it is most likely Longhorn will blow its horn come year end.

However, it still has to watch its liquidity position closely because it is yet bouyabt enough to celebrate. Working capital dropped from Ksh 403.105m to Ksh 337.741m and that says, eureka found by half year was limited still.

LONGHORN PUBLISHERS: Kshm 1/2 yr
                           Dec 2018.      Dec2017
Sales.                 679.565.       513.460
Cost of sale.     271.041.        191.059
Gross profit.     426.524.         322.401
Operating cost 336.339.         270.310
Profit before tax 90.185.           52.091
Profit after tax    68.831.           36.463
Profit margin %.   12.9.               10.1
Working capital. 337.741.       403.105

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