Scangroup profits up 151pc, Pan Africa down 42pc

Scangroup chief executive officer Bharat Thakrar. FILE 

By GEORGE OBULUTSA, Reuters

In Summary

• Scangroup said profit for the six months to June rose to Sh253.85 million ($2.89 million).
• Pan Africa investment returns fell by 59 per cent to Sh221 million in the period ending June.

Kenyan advertising firm Scangroup, listed on the Nairobi Securities Exchange, reported a 151 per cent rise in pre-tax profit for the first half of the year.

 

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Pan Africa Insurance Holdings, on the other hand, an unrelated NSE-listed company releasing its results on the same day, saw its first-half pre-tax profit fell by 42 per cent.

Scangroup, which also operates in Nigeria, Tanzania and Uganda, said profit for the six months rose to Sh253.85 million ($2.89 million) and revenues rose by just over a quarter helped by a jump in interest income.

Profits were buoyed by a one-off payment from Cavendish Square Holding, a subsidiary of British firm WPP, which raised its stake in Scangroup last year to 50.1 per cent from 36.62 per cent.

Net interest income jumped to Sh111.7 million from Sh20 million, helped by interest earned on a Sh1.83 billion payment from Cavendish Square Holding.

The advertising firm's earnings per share rose to Sh0.42 from Sh0.02. By 0803 GMT, Scangroup's shares were up 2.13 per cent at Sh48.00, but on low volumes.

READ: ScanGroup to acquire South African marketing firm.

The news was less rosy for Pan Africa Insurance Holdings whose first-half pre-tax profit fell due to a decline in investment income, triggering an 8 per cent drop in its stock.

The company, controlled by South African insurer Sanlam, said investment returns fell by 59 per cent to Sh221 million ($2.52 million) in the period ending June, leading to a decline in pre-tax profits to Sh495 million.

Pan Africa said the Nairobi Stock Exchange share index had fallen by 1 per cent to 4,885 points by the end of June this year compared to a similar period last year, while property sales also fell eroding its investment income. By 0803 GMT, its shares traded down 8.59 per cent at Sh117 on the day.

The company said its core life insurance business rose, pushing gross premiums up by 30 per cent from the previous year. It also said it plans to start new products this year, having launched a life cover as well as an insurance policy that insures customers who lose their jobs.

The insurer's earnings per share fell by slightly more than half to Sh4.07 from Sh8.34. The group said its board did not recommend paying an interim dividend consistent with the company's dividend policy.