, NAIROBI, Kenya, Mar 14 – The British American Investment Company (Britam) has returned to profitability after posting a net profit of Sh2.5 billion in 2012 from a loss of Sh1.9 billion in 2011.
It was a good year for the diversified financial services group with investment income climbing 52.1 percent to Sh1.97 billion.
Group Managing Director Benson Wairegi said the company also enjoyed particularly good benefits from its two strategic investments in Equity Bank and Housing Finance.
Included in its performance was a Sh394 million dividend income from Equity Bank as well as Sh3 billion fair value gains on financial assets compared to a fair value loss of Sh2.9 billion, highlighting the importance of Equity Bank’s share price to the performance of Britam.
On the other hand the share of profit of associate from Housing Finance increased by 4.9 percent to Sh146.8 million.
“The company’s strategy geared towards more stable earnings has been successful. The collective efforts have helped stabilise the company’s share at the NSE. As at yesterday (Wednesday), the share price had surpassed the IPO price of Sh9,” Wairegi said at an investor briefing.
The Investment portfolio registered investment income of Sh5 billion compared to a loss of Sh2.1 billion reported in 2011. Income before any unrealised gains from financial assets amounted to Sh2 billion against Sh808.8 million in 2011.
However expenses went up by 21 percent to hit Sh2.2 billion with revenue going up by 24 percent to Sh5.8 billion during the year.
The company acknowledged that the gap between the expenses and revenues was small, hence the need for an improved future strategic growth plan.
“Key focus areas will include local county expansion, increased products offering both in insurance and asset management business, regional expansion to the Eastern Africa region, investment in real estate, execution of a Sh10 billion property fund, expanding the core businesses by progressing the Group’s geographical and local expansion strategy with entry to new markets,” he said.
Shareholders will enjoy a 25 cents dividend payout per share compared to 15 cents in 2011.
The company expects the reported earnings momentum to be maintained into 2013, with a focus on new markets such as Tanzania and Rwanda as well as expansion in South Sudan.