Crown Paints first half net profit up 51pc on lower tax

News of the share buyback has seen the company’s stock rally at the Nairobi bourse. FILE PHOTO | NMG 

By VICTOR JUMA

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Crown Paints has reported a 51.6 per cent jump in the half year net profit, helped by a lower tax bill.

The company’s net earnings for six months ended June stood at Sh60.4 million compared to Sh39.8 million a year earlier.

This came as its current tax bill dropped 18.5 per cent to Sh49.6 million, boosting the bottom-line as the pre-tax earnings expanded at a slower rate of 9.2 per cent to Sh110.1 million.

Crown’s sales rose 5.5 per cent to Sh3.7 billion. The company, which did not detail its expenses, says the cost of raw materials increased in the review period and is expected to impact profitability in the full year. The paints maker plans to buy back its own shares in the short term.

Crown says it also plans to be trading its own stock, meaning it will make a profit by selling shares to new investors at a price it believes will be above the market rate.

News of the share buyback has seen the company’s stock rally to trade at the current highs of Sh78, nearly doubling since the start of the year when it stood at Sh42.

READ: Crown to buy-back shares through CMA

ALSO READ: Crown Paints to use reserves for shares buy-back