Express Kenya makes Sh1bn cash call to shareholders
An Express Kenya trailer. The firm's fortunes tumbled since it lost the lucrative East African Breweries Ltd contract in July last year to its rival SDV Transami. Photo/File
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The company would have made a loss of Sh76.2 million if the sale of assets was factored out, said its chairman Chris Obura in a statement accompanying the financial results.
Details of the rights issue, which will see participating shareholders get six shares for every one held, will be announced later.
Express Kenya management also said it was diversifying its business to include real estate development.
Transport and logistics company Express Kenya has announced plans to raise Sh1 billion through a rights issue after reporting a return to profitability on the back of asset sales.
The company would have made a loss of Sh76.2 million if the sale of assets was factored out, said its chairman Chris Obura in a statement accompanying the financial results.
Details of the rights issue, which will see participating shareholders get six shares for every one held, will be announced later, the company said Thursday in a statement.
Express Kenya management also said it was diversifying its business to include real estate development.
The rights issue is not subject to any minimum subscription level, the statement said. An annual general meeting is set to be held on September 21 to discuss the offer.
The firm made a net profit of Sh89.4 million in the first six months of the year compared to a Sh55 million loss in the same period last year, according to results released Thursday.
The company also suffered last year from servicing dollar-denominated credit facilities whose interest costs rose when the shilling weakened, especially towards the end of last year.
With the declining of the logistics business, the company is now set to get into real estate.
“The second half of the year is expected to yield improved results due to cost reduction realised from the reduction of staff in line with the business operations and reduced cost of finance,” said Dr Obura.
He said the company had continued to stabilise and the focus was on a number of investment opportunities in the future “including utilisation of its assets in real estate development to strengthen its performance”.
The top line at about half of what it was the previous year was a major indicator of the assets sales. Revenues were Sh128.7 million, down from Sh252.9 billion in the same period last year.
The sale of assets was recorded under “other operating income” which rose to Sh165.6 million from Sh18.8 million in the same period the previous year.
With the retrenchment, the company administrative expenses went down to Sh73.8 million from Sh83.1 million – an 11.2-per cent decline.
The performance of the firm for the six-month period was affected by change of its business model where it has been by hiring out its trucks and workshop, that it previously used in transporting merchandise for EABL.
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Note: The results are not exact but very close to the actual.
