Longhorn Publishers #ticker:LKL has swung back to profit riding on increased sales following the reopening of schools after easing of Covid-19 lockdown measures.
The publisher posted Sh7.5 million net profit for the full year to June this year, recovering from Sh226 million loss in 2020.
The return to profitability came as revenues rose by 16.5 percent to Sh1.24 billion in the year supported by schools reopening in the second half running between January and June, which saw the increased distribution of competency-based curriculum (CBC) books in Kenya and other learning materials.
“Kenya and Uganda began the year with schools’ closure and movement restrictions as part of the pandemic containment measures. Overall, the countries where Longhorn operates were adversely impacted by Covid-19,” said Longhorn.
Longhorn had sunk into a Sh145.3 million loss in the first half to December 2020 following the disruption of learning.
Uganda posted an 83 percent rise in sales revenue of more than Sh110 million as Kenya and Tanzania saw an increase of 18 percent and eight percent, respectively.
Longhorn board has frozen dividend payout for the second year following the business performance in the Covid-19 environment.
Finance costs increased by 21 percent to Sh183.2 million, mainly attributable to borrowings to support the regional expansion, product diversification and digital transformation.
“Management intends to reduce the loan balances progressively as the Group’s performance improves. Borrowings and finance costs have reduced by approximately 30 percent in Q1 of the financial year 2022,” said the publisher.
Longhorn plans to expand its regional presence to Ghana after entry into the Democratic Republic of Congo and Cameroon last year.