Longhorn Publishers has posted a Sh98.3 million net loss in the six months ended December 2022 as sales plunged on reduced purchasing by parents and the government.
The loss contrasted with Sh15.1 million net profit posted in the preceding period last year and came on the back of parents prioritising school fees and uniforms.
Sales fell by 46 percent or Sh444 million to Sh516.9 million during the review period while operating costs increased, piling more pressure on the bottom line.
“With the increased number of school terms in the last few calendar years, consumer spending power on books was depressed as parents and schools prioritised fees and uniforms,” said the firm.
Covid-19 disruptions that started mid-March 2020 led to school closures, disrupting the traditional school calendar that ushered in new dates. The normal calendar resumed in January.
The Nairobi Securities Exchange-listed publisher also said there was lower government business in the review period, largely on the changed school calendar.
“School calendar changes meant the peak season (for government, parents and schools purchases) moved from July as experienced in the comparative period to the second period with the expected start of school terms between January and March across the various markets,” said the publisher.
Operating expenses rose from Sh236 million to Sh237 million, while finance costs rose by five percent to Sh68.4 million on account of increased borrowing to fund expansion in the current markets it serves.
Longhorn says it is reviewing its business model across the markets and will make the “necessary changes” to realise efficiency.
The publisher operates in nine markets – Kenya, Uganda, Tanzania, Rwanda, Zambia, Malawi, the Democratic Republic of Congo, Cameroon and Ghana.
The firm received approval for grade seven books for the competency-based curriculum (CBC) and other complimentary titles in Kenya and several other titles in Cameroon.
Longhorn is now developing CBC content for grade eight, primary and secondary school classes in Kenya, Cameroon and Uganda. These will be submitted for approval this year.