Centum-owned #ticker:ICDC Longhorn Publishers #ticker:LKL has announced a 28.6 per cent rise in profit after tax for the year ended June 30, powered by cost-savings and strong regional sales.
The NSE-listed #ticker:NSE firm’s net profit increased to Sh133.87 million in the period compared with Sh104 million a year earlier, even as its turnover went down marginally.
Its turnover dropped 3 per cent to Sh1.4 billion in the period as reduced sales in Kenya took a toll on the publisher’s bottom line.
However, regional diversification paid off for the publisher in the period as total regional sales in Uganda, Tanzania, Malawi, Zambia, Rwanda and Senegal contributed 30 per cent of the group's turnover compared with 20 per cent in the previous year.
A 9 per cent drop in production and operating expenses boosted the company’s performance.
Longhorn recently sent home workers to stem costs and increase efficiency.
“Despite the reduction in turnover, the group improved its profitability due to an increased emphasis on cost management and production efficiencies,” the company said in a statement on Friday.
Going forward the firm says it will boost new revenue streams in line with its plan to shift its content to digital platforms with an eye on the multi-billion shilling primary schools computerisation programme.
The publisher has been repositioning itself as digital publishing company.
“Going forward Longhorn management is encouraged by the growth in the sale of digital products having developed the Longhorn e-learning platform and digitised over 300 products which are now available worldwide on digital platforms such as Google Play Store, Amazon.com and Wordreader,” it said.
“This is an area where Longhorn will continue to make investments as it positions itself as a provider of innovative learning solutions.”
The company recommended a final dividend of Sh0.29 per share.
Kenya government policies have signalled plans to cut down publishing companies’ revenues.
The government has thus partnered with the UK’s Department for International Development (DFID) to distribute millions of textbooks to public primary schools, taking away sales from publishers.
Mid this year, the Ministry of Education issued a notice requiring the Kenya Institute of Curriculum Development (KICD) to revert to a policy where schools are required to use one text book per subject.
It said the move would break publishing cartels that are working with KICD to recommend up to six books for parents and schools to purchase.