Customer billings rose to Sh2.37 billion while expenses also went up on acquisition of rival Kantar TNS.
Media and marketing services firm WPP Scangroup’s #ticker:SCAN net profit rose by 27.18 percent in the half year ended June to hit Sh249.85 million, helped by a rise in sales.
The Nairobi Securities Exchange-listed company had reported net earnings of Sh196.45 million the year before.
Customer billings jumped 32.29 percent to Sh2.37 billion, but this was offset by higher operating and administrative expenses, which rose 29.28 percent to Sh2.11 billion in the review period. The media firm linked the increase in expenses to the acquisition of a 70 percent stake in rival Kantar TNS.
“The increase in net sales is in line with the forecast and due to the acquisition of Kantar TNS which was only consolidated post June 2018,” said the company in a statement.
“The results for the six month period ended June 30, 2019 include the results of Kantar TNS whereas the comparative results for the period ended June 30, 2018 do not include the results of Kantar TNS.”
WPP Plc, Scangroup’s UK-based majority shareholder, is offloading a majority stake in market-research unit Kantar to Bain Capital Private Equity.
WPP had confirmed plans to sell the stake in Kantar in October last year.
“The transaction may result in material change in the company’s control of Kantar’s business in Africa,” said Scangroup in a cautionary statement.
According to an existing agreement between WPP and Scangroup, the deal also commits the NSE-listed firm to sell its stakes in the Kantar affiliates it owns in Africa.
These include scores of operating units in various African countries falling under investment holding companies Millward Brown and Research and Marketing, which Scangroup acquired just last year.
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