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Longhorn issues profit warning

NAIROBI, Kenya, Sep 13 – Longhorn Publishers Kenya has issued a profit warning for the financial year ended June 2012.

The company says during the year the publishing industry faced challenges characterised by reduced funding for free primary and secondary education in the country which adversely affected sales.

In addition high inflation, the depreciating shilling, and high finance costs also contributed necessitating unusually high provisions.

The publishing firm also experienced reduced export sales for the period, due to unfavorable developments in its export markets in Tanzania, Rwanda, and Uganda, which account for 33 percent of its total revenue.

The company reported revenues of Sh1.1 billion and net income of Sh136 million as at June 2011.

With Longhorn’s key business deriving largely from educational materials, at least 65.8 percent of its revenue comes from primary school book sales.

The firm went public in May this year, listing on the Nairobi Securities Exchange’s Alternative Market Segment.

After recently entering Malawi, Longhorn is keen on extending its footprint in prospect export markets currently eyeing Burundi and South Sudan.

In January this year, Longhorn bought Delah Publishers based in Dar-es-Salaam for Sh12.5 million, with the assurance that the Tanzanian market has the potential to add over half a billion shillings to group revenues over the next eight years.

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