For players like Safaricom and other listed juggernauts, stock market pundits use various methods and formula to determine a buy or sell call, but the common mwananchi often looks at the hard net profit number as a rough guide to any sort of corporate claim to fame or return on investment regardless of their shareholder status.
A good number of the companies listed on the Nairobi bourse have been so for over a decade, Safaricom crossing that threshold earlier this year on March 28.
This has allowed us to see their performance over time, with good and bad seasons trading places.
The season for financial reports and presentations by listed companies comes with a mixed bag of corporate emotions and expectations. If the entity has been performing below par from a market perception, the pressure is not as amplified as it is would be if performance has been satisfactory or better yet stellar.
For players like Safaricom and other listed juggernauts, stock market pundits use various methods and formula to determine a buy or sell call, but the common mwananchi often looks at the hard net profit number as a rough guide to any sort of corporate claim to fame or return on investment regardless of their shareholder status.
A good number of the companies listed on the Nairobi bourse have been so for over a decade, Safaricom crossing that threshold earlier this year on March 28. This has allowed us to see their performance over time, with good and bad seasons trading places.
The business life cycle has four, arguably five, phases which can be re-lived by an enterprise. These phases are; establishment, growth, maturity, decline and reinvention, with the latter not granted for every entity.
Safaricom has delivered on some solid numbers in the past, starting off as a dumb pipe transiting voice and SMS traffic, stumbling onto its golden goose M-Pesa and making a smart bet on stakes in SEACOM and TEAMS - cable operators with a network of submarine and terrestrial high-speed fibre-optic cables.
As the traditional cash cows that have driven much of the growth and revenue over the past decade hit a plateau from simple market size limitations and increased competition from eager underdogs, I am curious to see what strategy will be employed to keep the investor base happy with a sustained upward bearing. The strategy bouquet is a mix of the good, the bad and the ugly. The good would be continued investments in other companies or partnerships that can give it a pan-African footprint and reduce single market reliance and service differentiation on the back of true innovation leveraging physical and digital assets with Alpha, their new quasi-independent crack squad leading the charge.
The bad would be rationalisation on the human resource and pricing front. The ugly would be cannibalisation of partners from whom aggregated commissions and margins would make a healthy addition to the bottom-line. As with many things in life, getting to the top is easy, staying there is another thing altogether.
Njihia is the head of Business and Partnerships at Sure Corporation | www.mbuguanjihia.com | @mbuguanjihia
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