NAIROBI, Kenya, Jan 26 – Bread maker DPL Festive has announced a pre-tax of Sh62 million in the six months to September 2008.
Issuing the company’s unaudited results, Chief Executive Officer (CEO) Dipesh Shah said this represents a 225 percent rise in pre-tax profit compared to the Sh19 million that was recorded in the same period during the previous financial year.
“These commendable results have been achieved despite the challenges we experienced during the period last year, including the post-election upheavals and the dwindling disposable incomes among consumers; all which had an adverse bearing on the Kenyan economy,” said Mr Shah.
“These are very pleasing results for us. We managed to increase production within the period and our distribution network has been more elaborate,” said Mr Shah.
He said the profit realised in the six months was almost twice that recorded in the previous financial year. The company made Sh32 million in the financial year ending March 31, 2008.
Mr Shah said revenues grew by 83 percent, reaching Sh463 million, indicating a notable rise in demand for bread during that period.
The bread-maker is currently preparing to list its shares at the Nairobi Stock Exchange (NSE) and is merely awaiting approval by the market regulators.
“The company’s revenues for the six months ending September 30, 2008 reached Sh463 million compared to Shs 616 million recorded in the full year ending 31 March 2008. We, therefore, expect that our revenues for this financial year will by far outstrip those of the last financial year. This will definitely reflect positively on our profits,” said Mr Shah.
To prepare for listing, DPL Festive has converted itself into a public company, and has also boosted its paid-up capital. The company has reduced its par-value significantly and also created a future dividend policy.
The CEO said the bread-maker also plans to diversify its product range to include other wheat-based products and expand its distribution channels in Kenya.
DPL Festive’s total assets now exceed Sh185 million and its net cash flow has been strong.
Despite the 3.7 percent increase in the price of bread in November last year, the demand for the Festive range of bread is on the rise. The firm currently has 30 percent of the market share in Nairobi and its environs, where it predominantly operates.
DPL Festive’s foray into Kenya’s Sh10 billion bread market, will be boosted by a capital injection of Sh100 million this year, aimed at expanding its production line to meet market demand for bread.
“To cater for the rising demand, we are now in the process of acquiring a multi-million shilling baking machine. We expect to boost our supply to satisfy the emerging demand for our Festive bread,” he said.