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Crown Paints profits in 12 percent jump

CROWN-PAINTSNAIROBI, Kenya, August 31 – Crown Paints Kenya Limited has announced a 12 percent increase in profits after tax from Sh76.4 to Sh85.9 million for the six months ended June 30.

Crown Paints Chief Executive Officer, Rakesh Rao, says the increase was boosted by a surge in demand from the construction sector after the March elections that saw the firm post record sales of over Sh500 million in July.

Group revenues rose from Sh2.1 billion in the same period compared to Sh2.4 billion in first half of 2012, a 17 percent increase attributable to improved performance by the paint maker’s subsidiaries.

The company’s assets grew 9 percent from Sh2.2 billion to Sh2.4 billion in the same period.

Rao said the firm has seen a spike in sales in the last few months particularly in its premium category as it increasingly targets the increasingly fashion and style-conscious consumer in the booming real estate market.

“Our premium market now accounts for 60 percent of our demand portfolio signifying strong demand in this category, this has seen our sales cross the half-a-billion shillings per month mark for the first time,” said Rao.

He added that sales volumes have grown from 1.5 million litres per month last year to the current 2.1 million litres.

The firm posted Sh4.4 billion in turnover in 2012, with this expected to grow by as much as 20 percent this year based on present trends, and as new product sales pick up.

This year alone, the company has launched four new products, all water-based and therefore environmentally friendly.

The company anticipates maintaining a similar trend as that observed during the first half of the year.

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“We have a positive outlook for the second half of the year given the current state of the construction industry,” said Rao.

Data released by the Kenya National Bureau of Statistics shows that the construction sector grew by 13.5 percent in the first quarter of 2013 compared to 3.1 percent growth in a similar period last year.

The significant rise in construction activity was linked to a decline in interest rates spurring investment in the sector as well as the peaceful election outcome in March leading to increased investor confidence.

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