Companies

NMG posts Sh3.6 billion profit  

linus

Nation Media Group CEO Linus Gitahi speaks during the investor briefing at Serena Hotel in Nairobi March 20, 2014. NMG's profit before tax grew 2.4 per cent to Sh3.6 billion. Photo/BILLY MUTAI

Nation Media Group (NMG) on Thursday announced a 20 per cent rise in its dividend payout after it reported a Sh3.6 billion profit before tax for the year ended December 2013.

Chief executive officer Linus Gitahi told investors that NMG’s profit before tax grew 2.4 per cent to Sh3.6 billion, riding on an 8.3 per cent revenue growth to Sh13.4 billion.

That outcome enabled NMG directors to recommend a dividend payment of Sh10 per share, meaning that the media house will pay out a total of Sh1.9 billion to shareholders.

Though the dividend per share has been kept at the same level as the previous year’s, the company is paying Sh314 million more to shareholders in real terms having issued a bonus of one share for every five held in 2013.

“We are confident about the company’s performance and that is why we are keeping the dividend at Sh10 per share,” said Mr Gitahi.

“However, the total cash payment to shareholders has actually increased by 20 per cent.”

Shareholder funds grew from Sh7.3 billion to Sh8.2 billion in the reporting period – a margin of 12 per cent – while the company’s cash pile stood at Sh4.1 billion.

NMG’s share price stood at Sh323 at the close of trading on Thursday. This means that the share price has appreciated by 35.7 per cent in the year to date, making it one of the most sought-after stocks at the Nairobi Securities Exchange (NSE).

NMG’s performance was driven by robust outcome in a number of business units led by its Kiswahili TV channel QTV whose revenue expanded by 117 per cent and 54 per cent operating profit growth.

The Business Daily posted a 51 per cent operating profit growth while circulation and advertising revenue increased 12 per cent and 13 per cent respectively.

Tanzania’s Mwananchi Communications operating profit grew by 29 per cent while advertising revenue at Nation Newspaper’s Division grew 12 per cent.

“Despite the impact of the general election and the recently introduced VAT, the underlying individual businesses did very well” said Mr Gitahi.

He paid special mention to the performance of Nairobi News, the latest addition to the company’s newspaper portfolio. The newspaper, which was launched in November targeting Nairobi residents, offers informative news from the county.

While the circulation of the print version is growing, their new newspaper’s website is already recording 500,000 unique visits per month.

This growth is in step with that realised by the group’s digital division where online advertising went up 27 per cent.

“We are investing heavily in the digital division since we know it is the next frontier,” said Mr Gitahi. “The performance of this division is proof that the move to digital is extremely beneficial to us and in line with our goal of digital first.”

READ: NMG grows its online platforms in leaps and bounds

Going forward, the CEO says the company will remain focused on innovating as well as improving its products already in the market.

The CEO reiterated that the company fully supported digital migration and expects to benefit from increased footprint for its two television stations; NTV and QTV.

The stations are available in about a third of the available locations but with digital migration this is expected to increase significantly.

Additions to the various NMG platforms in the recent past include the Governors Summit first aired on NTV in January and Seeds of Gold, the agri-business magazine recently introduced in Saturday Nation.

NationHela, NMG’s prepaid Visa debit card, is growing and so far has 14,000 users. Mr Gitahi added that plans are under way to install a new printing press.

In Kenya, the group publishes the Daily NationThe EastAfrican, Taifa Leo, and the Business Daily newspapers and runs two radio stations, Easy FM and QFM and two TV stations, NTV and QTV.

In Uganda, the company operates NTV Uganda while its subsidiary, Monitor Publications, publishes Daily Monitor newspaper, the Monitor Telephone Directory, operates KFM radio station and Dembe FM.

In Tanzania the company operates through its subsidiary Mwananchi communications limited, whose print publications includes; Mwananchi, Mwanaspoti and The Citizen.