Financial Results for the Year Ended February 28, 2010 Comments:
The year ended February 2010 was a very eventful year for your company. It was during this year that our two businesses in South Africa were placed into liquidation. We provided for the bulk of the losses from the liquidations in the accounts to February 2009, except for an amount of Ksh 18 million that was advanced to Natural Wooden Products (pty) Limited after February 2009. We have expensed for this amount in the audited financial statements for the year ended February 2010.
A decision was made to liquidate our holdings on the Nairobi Stock Exchange to help fund the purchase of the South African businesses from the liquidators. This sale resulted in a realised loss of Ksh 18 million due to the depressed prices at the time of the sale.
Apart from the above two amounts, which we do not consider as normal costs in our continuing
business, the year was fairly uneventful on other fronts.
We are pleased that our offer to purchase the Yokota brand name used by the now liquidated Plush
Products (pty) Limited was accepted and we recommenced business as a 100% direct subsidiary of Olympia Capital Holdings Limited on 1st March 2010. The new business which trades as Yokota SA
operates without any debt and on a much smaller scale than the old business.
Our offer to purchase all the assets, plant and equipment of Natural Wooden Products (pty) Limited was also accepted by the liquidator. The new business which trades as Natwood Africa is also a 100% subsidiary of Olympia Capital Holdings Limited effective 1st March 2010.
Financials:
Mather & Platt Kenya Limited was finally consolidated into our accounts as it is now a subsidiary. This is the cause of the increase in top line from Ksh 501 million to Ksh 618 million.
Our gross profits were the same as the previous year, which is a lower as a percentage compared to the previous year due to the higher turnover. This is an area we will be concentrating on in the year 2010/2011.
It is important to note that in the year ended February 2009, we received a special one off dividend from our investment in Heri Limited of Ksh 44 million.
There was a marked increase in expenses and this includes the losses made from the sale of our listed shares on the Nairobi Stock Exchange. Our profit before tax reduced from Ksh 60 million to Ksh 25.6 million.
Due to certain subsidiaries paying significantly higher taxes due to profitability, our tax expense
increased from Ksh 11 million to Ksh 19 million.
Future Prospects:
All efforts are being placed on ensuring that the two South African businesses at least break even in their first year of operations. We are also making a marked effort to remove any costs possible from our operations to ensure a higher percentage of sales reaches it to the bottom line.
Dividends:
A decision was made to keep the dividend in line with that of the previous year at Ksh 0.10 per share. This dividend will be paid to shareholders who are registered at the close business on 29th July 2010. The register will remain closed for one day on 30th July 2010. Payment of the dividend will be on 1st
September 2010.
Board Changes:
Following a vacancy on the executive side of our board, we are pleased to announce that Ms. Nancy
Mwai, who has been the Group Finance Manager since January 2009 has been appointed as an
Executive Director. Mr. Mucai Kunyiha, who has served the board for several years as a non executive director, has stepped down from the board. He remains a director of our subsidiary Avon Rubber Company Kenya Limited, where he has direct interests. We are pleased to advise that we have appointed Mr. Vincent Opanga to fill the vacancy. Mr. Opanga is currently the Managing Director of Kisii Bottlers Limited.
Michael Matu
Chief Executive
1st July 2010
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett