Not sure this had not been uploaded somewhere

Pesa name na CNG nikama @obiero na kq.

C&G is now a "property" firm with a trading arm that pays the bills!

I like the management but it's a TOUGH business to be in.
- Lots of competition with some shady characters who are "connected" [tax evasion]
- Construction is in trouble. Chinese contractors bring in their own equipment and don't need suppliers. Large local contractors [roads, etc] are broke [GoK isn't paying] if not dead.
- Competition from Chinese brands eg motorbikes

The admin costs are very, very high. Not sure what they consist of. They have technical workshops that require lots of personnel. Perhaps that is part of the reason. The margins seem quite low since they have to compete with Kirinyaga Rd and jua kali guys.

I wonder how a "franchise" model would work for them?

To me it appears a lack of focus and structure - they're involved in poultry, motorbikes (TVS which struggles against Bajaj and the host of Chinese bikes), tuk tuks, Kubota tractors, right up to Cummins gensets and Doosan (South Korean) earth-moving machinery (all exhibited in or around one show-room).

They've been unable to crack the Kshs. 10bn in revenue that they've been targeting for the last three years or so - my view is that Gidoomal et al are in a comfort zone (a bit like the old CMC - which incidentally they tried a hostile takeover bid in the late '90's.)

Maybe it's time they had another review and spun off or retired parts of the business (as they did with the Alfa Romeo franchise a few years ago) and paid down some of the debt. The interest rate cap should help them a little this FY, but the down-turn in construction and the economy in general won't (unless they can convince Jubilee/Cord to buy like 50,000 TVS's or tuk tuks for campaign - lol). They import everything that they sell - so dollar strength/shilling weakness will work against them.

My MBWA benchmarking reveals that there is a host of 'small' engineering supplies companies located in Industrial Area selling various power tools, gensets, compressors, concrete mixers, water pumps and the like (mostly sourced from India or southern Europe) - selling, distribution and admin costs from what I can ascertain are minimal - and their customers range from the 'jua kali' operators to large building construction outfits. They're eating CNG's lunch and more...As @VVS says this is now a 'property' firm, and the rest of the business finances Giddomal's travels to the rest of the world buying stuff for which there is not much effective demand in Kenya...If I was him, I would sell everything (including the properties), pay off the debt and 'invest' the rest in fixed income or other securities - much as what City Trust did many, many years ago when the brewing industry went into a decline... my two kenyan shillings for whatever they're worth...

@obiero - niko ndugu... just trying to make an honest buck, not looking for any awards! According to me, at the end of the day, it doesn't really matter whether you're a buy and hold 'long-term' investor, speculative trader, fundamentalist, technical analyst, elliot waver - to each his own, so long as your needs are met - after all its only through my own personal efforts and investment decisions that I can put unga on my table!

Wishing you and all blue section wazuans a prosperous 2017 - in my view there's prospects for what some directors in listed companies sometimes refer to as 'satisfactory returns' to be made this year and next...

On point and worth a lot more than 2 cents. Engineering is interesting and can encompass multiple lines of business or products. That said, there seems to be a lack of synergies between the businesses.

Poultry - That's supposed to go away as indicated in the 2015 AR. I was told a few years ago that it was a add on (acquired as part of another deal) business in TZ. Good riddance.

The GE model should apply here. Be #1 or #2 in these businesses.

Property: Become a REIT. Sell off all business lines to street savvy operators. Rent out the premises. Develop the multiple properties so close to the CBD, South C B and Upper Hill.

I feel this is under valued for now and will hold on to what i have but i will not buy more until they change tact.

I think the JV will be good for C&G. I do not think the JV was operational as of Sep 2016. Let's wait to read the Annual Report and more details at the AGM.

My thoughts:
1) Yes, Cummins get "direct access" to 11 territories BUT except for Kenya, the others are not that "big" for C&G. In other words, Kenya remains #1 for C&G by a huge margin. Cummins with more heft could expand the "direct" market for their products in the other 10 by curbing grey market sales.

2) Yes, 50% of the pie BUT I believe the pie will become bigger. It would be interesting to see the breakout of Cummins [Kenya + 10] pre-JV then compare to post-JV in 2018-19. I doubt the JV will be operational until after elections.

3) True but CAT has a huge distributor in Kenya. Mantrac? There is/was a huge sign somewhere along Mombasa Road.
Doesn't giving up control of Cummins to the JV free C&G from acquiring other brands? In other words, why would CAT [or a powerful competing brand] want to use C&G which also sells Cummins?

4) I think both will benefit i.e. C&G gives up 50% but perhaps Cummins is motivated by a potentially larger market share? [I want Cummins to provide larger gensets and equipment via the JV instead of supplying directly or using Dubai/India/SA]. Nevertheless, you have an excellent point.

5) I think the JV is restricted to Cummins. [Why would Cummins want the rest of the biz?]. The JV may help with financing of products. Deacons had that arrangement with Woolworths after WW bought 51%.

As @ElephantMan said, C&G needs to become the place to go. I would not even have thought of C&G for tyres for cars. How many do they even sell?

I don't like/trust Merali or his firms BUT he opened up Yana shops all over to push Yana products. C&G shouldn't just open shops ovyo ovyo but it has been overtaken by Auto Express [Nyanza Petroleum], Kwit Fit [one which is based in their premises on Lusaka Rd], etc.

Garmin - C&G needs to liaise with Garmin [& some savvy operator] to install units in all lorries as "monitoring" devices as part of a GoK project. Look at what Michuki did with speed governors when only a "selected" few could import these!

Anyway, for now, I will take a wait & see approach. There are many other sweeter deals in the market!