Nation Media to install Sh1.5bn press mid next year

Nation Media Group (NMG) will install a Sh1.5 billion state-of-the-art printing press mid next year to improve the quality of newspapers and increase pagination.

It will replace the current one at Nairobi’s Mombasa Road printing plant that has been in use for the past 17 years.

The capital expenditure plan was revealed at NMG’s annual general meeting in Nairobi on Friday by group chairman Wilfred Kiboro.

“We expect to commission the new press mid next year,” said Mr Kiboro, adding that NMG has already ordered the modern printer.

The new press is part of the company’s ongoing investments in operations and distribution meant to boost sales and efficiency.

Mr Kiboro said the company will this year focus on consolidating its subsidiaries and will temporarily suspend its regional expansion plans owing to increased risks.

He cited political instability, terrorism, hostile media laws and regulations as some of the factors that have depressed investor confidence in eastern Africa.
He said the company is ready to resume its outward expansion once the outlook has improved.

NMG has over the past five years invested billions of shillings in acquisitions and greenfield ventures in print, digital and broadcast media in Uganda, Rwanda and Tanzania.

Subsidiaries in these markets have contributed positively to the group’s earnings, helping to diversify from the Kenyan market and offering potential for future growth.

The company had cash and cash equivalents amounting to Sh4 billion as of December, having climbed from Sh3.9 billion in the year ended 2012.

Mr Kiboro said the growing cash pile is critical in funding NMG’s future growth and maintaining its financial strength. The cash reserves also earn hundreds of millions of shillings in interest, boosting the group’s overall performance.

While the company has adopted a wait-and-see stance to regional expansion, it will continue to invest in digital platforms that are growing fast.

“We continue to invest in digital platforms knowing full well that this is the future of media,” said Linus Gitahi, NMG’s chief executive officer.

Mr Gitahi noted that the company’s digital media, comprising online news websites and SMS-based subscription services, grew by double digits in the year ended December.

READ: NMG grows its online platforms in leaps and bounds

He added that the investment in digital platforms puts the company in good stead to carry over its dominance in print media.

Shareholders approved the payout of a total dividend of Sh10 per share for the year ended December, when the firm’s pre-tax profit grew 2.4 per cent to Sh3.6 billion.

NMG’s share price closed at Sh314 on Friday, gaining Sh2 from the previous day’s price of Sh312.