Scangroup spreads its wings in the region

May 20, 2008

, NAIROBI, May 19 – Marketing Services Company Scangroup limited Monday revealed that it would embark on a series of projects that would see the firm grow its operations in countries where it is represented.

Scangroup Chief Executive Officer (CEO) Bharat Thakrar told the company’s shareholders that they planned to diversify and strengthen their media delivery system across East, Central and South Africa through acquisitions or mergers, re-launching their public relations agencies.

They are also targeting 48 percent of companies that do not use media agencies to plan their advertisements.

Noting that 100 percent of their revenues come from East Africa, the CEO said they were looking at reducing it to about 65 percent with the remainder coming from the rest of Africa.

“We have a clear focus. We want to get into other markets across the continent and we have to get into other areas if we have to sustain our growth going forward,” he stressed.

According to the Steadman Group, the Advertising Exposure (Adex) in East Africa grew by 30 percent over 2006. In Kenya, it grew by 28 percent while Tanzania and Uganda recorded a 36 percent and 32 percent growth respectively.

The billings in Kenya grew by 58 percent to over Sh4.7 billion while net revenues were up by 39 percent to Sh1.1 billion.

“Kenya is still our dominant market and contributed to over 77 percent of the net revenue,” Thakrar said while presenting the company’s results.

At the second Annual General Meeting (AGM) since the company’s shares started trading at the Nairobi Stock Exchange (NSE), Thakrar also disclosed that they were in the process of acquiring a minority stake in a South African agency.

He said although their arrangements to enter Nigeria failed, the company would in the near future re-look at its strategy to venture into the West African market.

Sources however said the company was looking at going into the region through Ghana.

In 2007, the company acquired Redsky Kenya, managing to bring on board the country’s largest cellular advertiser Safaricom, while in neighbouring Uganda they also took over Redsky Uganda, which handled the third largest cellular operator, Uganda Telecom.

“With these acquisitions, we now have a strong foothold in the high growth cellular category in East Africa, which has significantly strengthened our marketing position,” he boasted to the shareholders.

During the meeting, Thakrar announced that the board had approved a 90 cent dividend per share.

“We also plan to get into the research business,” he added, citing the conclusion of a joint venture agreement with WPP to set up Millward Brown East Africa (EA).

Millward Brown is a global leader in advertising, media, marketing, communication and brand equity research.

Millward EA commenced its operations in January 2008.

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