By Frankline Sunday
Standard Group Non Executive Director Zehrabanu Janmohamed, Increased growth in advertising and heavy investment in technology have buoyed 2014 earnings of Standard Group Ltd to a four-year high. This comes even as media companies in the country face immense challenges across print and broadcasting platforms.
The Standard Group posted a pretax profit of Sh326 million representing an 8 per cent growth from Sh301 million recorded in 2013 with turnover standing at Sh4.8 billion. Advertising revenue for the print grew by 8 per cent, radio 66 per cent and television 6 per cent during the same period. Speaking during the annual general meeting at the Standard Group Centre, on Mombasa Road in Nairobi, yesterday, CEO Sam Shollei said the company’s performance was robust despite challenges to the business and regulatory environment.
“The introduction of VAT on newspapers half way through 2013 impacted negatively on the newspaper business and this saw the cover price go up by 20 per cent,” he explained. “At the same time, a key challenge that continues to affect the Group’s business operations is the protracted tussle with Government over digital migration.” Last year the three leading media firms in the country, including Standard Group, moved from the High Court to the Supreme Court in an attempt to have the Government extend the digital migration deadline.
Since majority of television viewers in Kenay are unable to immediately purchase decoders for the digital signal, they are effectively locked out of accessing broadcasting content. Despite this challenge however, the Standard Group’s broadcasting division still continues to command a large share of viewers and listeners in Kenya.
KTN reclaimed its second position in terms of viewership in the second half of 2014 boosted by the introduction of new and unique programming that has proven popular among the audience. The company’s radio station Radio Maisha has also registered growth to become the third best radio station in Kenya. Mr Shollei stated that the company’s investment in technology across all its divisions is beginning to pan out and is set to boost efficiency and productivity.
Growth strategy “We are working on an improved content presentation strategy as well as an upcoming re-design that is expected to grow readership for our flagship newspaper The Standard,” he said. “In addition to this, the company has invested in advertising and editorial electronic automation system – PPI. The technology, which was procured from Germany, completely integrates the flow and production of editorial content, advertising workflow and pre-press production processes.
”The CEO said the Group has also invested in a top-of-the range Enterprise Resource Planning System (SAP) designed to integrate all areas of the business by providing a central platform or database where all business processes can be executed in real time.
This means all crucial departments including financial, procurement, sales and distribution have a new end-to-end solution that makes operations more fluid boosting efficiency. Mr Shollei further said the company’s digital division is enjoying a comfortable lead in the market and is set to be a major revenue earner in future.
Another product enjoying popular following is The Nairobian, which was launched in 2013 and has since grown to be one of the leading circulating papers in the market. The shareholders approved payment of Sh0.50 dividend for the year 2014, subject to withholding tax. During the AGM, shareholders also re-elected Mr Robin Sewell as Board Chairman.
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