NAIROBI, Kenya, Aug 3 – Olympia Capital Holdings has announced a Sh56 million loss for the year ended February 2009 compared to a profit of Sh20 million posted last year.
Chairman Dr Chris Obura said on Monday that the poor performance resulted from the company’s decision to provide Sh115 million for the investment loss and contingent liabilities which would have resulted from the closure of their South African subsidiary Plush Products Limited.
They also provided for loans advanced to a manufacturing business, Natural Wooden Products (Natwood), where they had intended to acquire a certain stake.
“The turn of events in South Africa was unexpected and worrisome. In mid 2008, we noticed a marked reduction in sales in both Plush and Natwood. This was due to the first recession in South Africa in 17 years,” he explained about the phenomenon that forced the company to opt to sell off the assets and consider re-entering the market on a model that does not deal with the large retail chains in South Africa.
Plush and Natwood have not been contributing to the group’s profitability since their involvement and this therefore resulted in a net reduction of the bank borrowings of Sh140 million and elimination of Sh180 million in debtors factoring.
Mr Obura assured stakeholders that any savings in the closure of Plush and the successful acquisition of Natwood would be written back to their books at the appropriate time.
“In Natwood, we decided to retain the existing business but restructure it also. That is why we have provided for the advances to Natwood. But we are optimistic that the restructuring will succeed. We do not anticipate the group making any further investments in South Africa for the foreseeable future,” he added.
The statement also showed that the group’s turnover dropped from Sh1.3 billion to Sh521 million although profit from operations rose from Sh68 million shillings to Sh77 million.
The company’s PVC tile and Adhesive operations in Kenya, Dunlop Industries Limited, did not fare well.
Dunlop only managed to turn a profit in the last two months of the financial year but made a loss in the period under review which contributed to the group’s poor results.
It was however a different story for Mather + Platt Kenya Limited (M+P), a local Fire Systems, Water Services and Mechanical Installations business which had a slightly better year and made a positive contribution to the bottom line in its first year in their group.
Botswana’s Kalahari Floor Tiles improved its bottom line by 50 percent after its four divisions performed well.
Dr Obura however said that despite the loss, the board had decided to pay a dividend of Sh0.10 per share to those shareholders registered in their books at the close of business on the 21st of August.