AccessKenya managing director Jonathan Somen. Photo/File
What you need to know:
Net profit grew to 151.3 million in the year to December compared to Sh109m a year earlier.
This helped the company pay a dividend of Sh0.30 a share.
Internet service provider AccessKenya will for the first time in three years pay a dividend after announcing a 38.8 per cent increase in net profit.
The firm yesterday said its net profit grew to Sh151.3 million in the year to December compared to Sh109 million a year earlier and a loss of Sh7.9 million in 2010, but its revenues grew 8.9 per cent to Sh1.9 billion.
This helped the company pay a dividend of Sh0.30 a share—a boon to investors who have seen shares gain 55 per cent to Sh7.05 a piece over the past three months. But the stock remains below its June 2007 IPO price of Sh10 a share.
The firm paid a dividend of Sh0.30 in 2009 and Sh0.50 in 2008, with Managing Director Jonathan Somen attributing the rebound to market share growth.
“Our corporate leased lines grew from 4,700 to 5,400 compared to the same period in 2011,” said Mr Somen in a statement. “This is an indication that we remained steadfast in our core business —corporate data and IT solutions,” he added.
But the new business did not have a corresponding impact on its revenues, underlining the impact of the ongoing price war in Kenya’s telecom market.
This shows the profits got a lift from its stable costs and highlights the competitive pressure faced by AccessKenya in a market that has attracted cash flush mobile telephony firms such as Safaricom, triggering a price war.
The Communication Commission of Kenya data places its market share at 16.5 per cent based on subscribers in September behind Wananchi Group (41.5 per cent). Telkom Kenya’s stake stood at 13.5 per cent and Safaricom at 9.6 per cent.
The rising competitive pressure saw the firm increasingly pursue cost cutting plans over top line growth in the two years to 2011, but signalled a shift in the strategy last year.
“In 2013, we will continue to take steps forward in many ways of the business, in particular corporate data sales,” said Mr Somen who will become a key beneficiary of the dividend payment given that he is the largest shareholder.
He firmed his grip as the top owner by increasing his shareholding to 16.96 per cent in November from 16.6 per cent last December and will receive Sh11.1 million in dividends for his 16.96 per cent stake.
The Somen family has in the 18 months to December increased their ownership to 30.26 per cent from 25.3 per cent mid-2011, helped by the Internet service firm’s lower share prices.
“This is a share buy-back strategy informed by the extremely low share price and the belief by the principal shareholders that fundamentals remain strong,” said analysts at Kestrel Capital.
