Olympia replaces chief executive in turnaround plan

• Olympia on Wednesday picked Kenneth Kareithi from its subsidiary Mather+Platt to head the company that recently made changes to its board and hired a new finance director — Mr David Kabeberi.
• Mr Matu, who has a 2.7 per cent stake in Olympia, will remain in the board as deputy chairman — maintaining the firm grip of the investment firm by the Matu Wamae family that owns significant shares.
• Olympia said its net profit for the year ended February stood at Sh42.8 million compared to Sh35.1 million a year earlier and Sh6.4 million in 2010 — but the performance was lower than 2009 when its net  earnings stood at Sh49.3 million.
• Mr Kareithi, who has previously served in blue chip companies BAT Kenya, Nation Media Group and East African Breweries, will shepherd its recovery and guide it through fresh acquisitions including that of Mather+Platt, which Olympia owns 51 per cent.

Olympia Capital has replaced its long-serving CEO Michael Matu as the investment firm searches for new ideas to complete its turnaround.

Olympia on Wednesday picked Kenneth Kareithi from its subsidiary Mather+Platt to head the company that recently made changes to its board and hired a new finance director — Mr David Kabeberi.

The changes in Olympia board and executive suite comes when the Nairobi Securities Exchange listed firm turnaround efforts have begun to bear fruit, culminating in the firm lifting its dividend freeze this year.

Olympia also announced that it plans to buy out the minority shareholders of Mather+Platt to assume full control of the engineering equipment firm in a deal worth Sh84 million.

“It’s time I concentrated on other things. I mean how many new ideas can a person have after being CEO of this company for 17 years?” asked Mr Matu in an interview with the Business Daily on Wednesday after the company’s mid-morning board meeting that approved the changes. “I am happy about the changes as I will now focus on strategy at the group level,” he said.

Mr Matu, who has a 2.7 per cent stake in Olympia, will remain in the board as deputy chairman — maintaining the firm grip of the investment firm by the Matu Wamae family that owns significant shares.

The shift in the executive suite comes in a year when Olympia reversed its drop in profitability that saw it declare a dividend of Sh0.10 a share after freezing payouts since 2008.

Olympia said its net profit for the year ended February stood at Sh42.8 million compared to Sh35.1 million a year earlier and Sh6.4 million in 2010 — but the performance was lower than 2009 when its net  earnings stood at Sh49.3 million.

Mr Kareithi, who has previously served in blue chip companies BAT Kenya, Nation Media Group and East African Breweries, will shepherd its recovery and guide it through fresh acquisitions including that of Mather+Platt, which Olympia owns 51 per cent.

Other Mather+Platt shareholders of include its former CEO David Kireri (30 per cent) and John Simba, who sits in the board of Olympia. The acquisitions will see Olympia break its six-year deal-making drought that has seen it trail its peers Trans-Century and Centum Investment.

Mr Matu said the company would pay for half of the Sh84 million needed to close the deal in cash and the remaining half in Olympia’s shares.

“Mather is performing well and that is why we are consolidating it,” Mr Matu said. Mather deals in fire systems, water services, and mechanical installations. The firm is also set to buy out minority shareholders in its Gaborone subsidiary, which accounts for 90 per cent of its profits.

Top shareholders of Olympia Capital have quit their board positions. Christopher Obura, who owns a 9.8 per cent stake in the firm, has retired as chairman and an appointee from his investment company Karen Enterprises will assume this role.

Businessman Paul Ndung’u, who has an 11.4 per cent stake in the firm, has also quit the board and they are set to be replaced at Olympia’s AGM on Monday.

Its shares have shed 13.64 per cent in the past year to its current price of Sh3.80 and stockbrokers reckon that they receive little investor interest due its sluggish performance their slump into loss-making.