Longhorn Publishers #ticker:LKL recorded flat net earnings of Sh68.9 million in the half year ended December, 2019, amid sluggish sales and increased selling expenses.
The Nairobi Securities Exchange-listed firm’s net profit in the year before stood at Sh68.8 million.
Turnover rose four percent to Sh725.4 million while the cost of goods sold jumped 28.8 percent to Sh349.2 million.
“The total comprehensive income and net margins remained relatively flat from the prior period due to development costs for new products,” Longhorn said in a statement.
“However, the margins are set to improve in the second half of the financial year as the group is set to realise higher returns from investments made earlier in the year.”
The company invested Sh170.1 million in its operations in the review period, up 26 percent from Sh134.9 million a year earlier.
This contributed to its cash holdings dropping to Sh3,000 from Sh92.6 million, with the company also noting that it is owed millions of shillings from customers who made purchases in the fourth quarter of 2019.
“The decline in cash and cash equivalents in the period is mainly due to the change in the sales cycle, which resulted in a rise in the sales in the months of November and December, hence increasing the amount of payments owed by customers at half-year,” Longhorn said.