Summary
- 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 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.
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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