Longhorn posts flat profit as expansion costs rise
Longhorn Kenya managing director Musyoki Muli speaks during the release of the company's full-year to June 2014 in Nairobi on September 26, 2014. PHOTO | SALATON NJAU
What you need to know:
Longhorn posted a one per cent rise in net profit to June 2014 of Sh94.9 million from Sh93.9 million last year.
Distribution expenses more than doubled to Sh209 million from Sh80 million occasioned by the increased regional sales.
Publishing firm Longhorn Kenya recorded flat growth in its full-year profit offset by high distribution costs as it increases its footprint in regional markets.
The Nairobi Securities Exchange-listed company posted a one per cent rise in net profit to June 2014 of Sh94.9 million from Sh93.9 million last year.
“This is attributed to the heavy distribution cost incurred in a bid to entrench the Longhorn brand in the regional markets,” the firm said in a statement.
Sales jumped by more than a third to Sh1.396 billion from Sh1.033 billion a year earlier helped by exports to Malawi, Rwanda, Tanzania and Uganda. The firm also saw increased sales in the Kenyan market.
Longhorn’s distribution expenses more than doubled to Sh209 million from Sh80 million occasioned by the increased regional sales. The management, however, said the costs are expected to reduce going forward as those incurred were initial set-up expenses.
“We expect Longhorn’s bottom line to come in higher in the coming years as the distribution costs ease off. We also anticipate top line to be boosted by the recently penetrated regional markets,” said Standard Investment Bank in a note.
