Longhorn Publishers posts full-year net profit of Sh7.5mn
Longhorn Publishers has bounced back to profitability to post Sh7.5 million net profit for the full year to June this year, recovering from Sh226 million loss in 2020. This is mainly due to the increase in sales following the reopening of schools after easing of Covid-19 lockdown measures. Maxwell Wahome, Group Managing Director and CEO joins CNBC Africa for more.
Wed, 29 Sep 2021 14:55:45 GMT
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AI Generated Summary
- Longhorn Publishers achieves notable recovery, posting 7.5 million Kenyan shillings in net profit for FY21 after facing a 226 million shilling loss in the previous year.
- Strategic adaptation to school closures and diversification into regional markets such as Uganda and Tanzania contribute to the company's financial turnaround.
- Investments in digital content platforms, innovative learning solutions, and market expansion underscore Longhorn Publishers' commitment to growth and sustainability.
Longhorn Publishers, the renowned education materials provider, has made a remarkable recovery by posting a net profit of 7.5 million Kenyan shillings for the full year ending in June this year. This impressive turnaround comes on the heels of a substantial loss of 226 million Kenyan shillings in the previous year. The company attributes this bounce back in profitability to increased sales, buoyed by the reopening of schools following the easing of COVID-19 lockdown measures. Maxwell Wahome, the Group Managing Director and CEO, shared insights on the company's strategic initiatives and impressive financial performance in an interview with CNBC Africa.
Wahome highlighted the unexpected disruption caused by the prolonged closure of schools globally due to the pandemic, which presented a significant challenge to businesses in the education sector. Longhorn Publishers swiftly adapted by focusing on product segments that remained viable during the school closures and leveraging markets outside of Kenya, such as Tanzania and West Africa, to sustain revenue streams. Additionally, the company capitalized on creative segments like educational materials for children and adults, which continued to contribute to revenue despite the school closures.
The financial results for the year ending in June 2021 showcased a substantial recovery, with Longhorn Publishers achieving a break-even performance after a challenging period marked by school closures. Wahome emphasized that regional markets, particularly Uganda and Tanzania, played a pivotal role in the company's turnaround. Uganda recorded an impressive 83% growth, while Tanzania saw an 8% increase in revenue, demonstrating the company's resilience and growth trajectory in these markets. Notably, the newly established West Africa market in Cameroon contributed 10% to the company's overall performance, with revenue exceeding one million dollars in its inaugural year of operations.
Despite the resurgence in revenue, Longhorn Publishers opted to withhold dividend payouts in the current financial year to bolster liquidity and ensure financial stability. The company remains focused on maintaining a strong liquidity position before revisiting dividend payments in the future. Wahome highlighted that prudent cash flow management was essential for the company's long-term sustainability and growth.
Furthermore, Longhorn Publishers demonstrated a commitment to reducing borrowing and finance costs, with a notable 30% decrease in Q1. The company's strategic decision to continue diversification initiatives and uphold operational efficiency led to a significant reduction in borrowings. This financial discipline bodes well for Longhorn Publishers' financial health and sets the stage for sustainable growth in the future.
Addressing investor sentiment and market performance, Longhorn Publishers highlighted its digital strategy as a key driver of future revenue growth. By investing in digital content platforms and innovative learning solutions like Somo, the company aims to tap into new market segments and expand its digital revenue streams. The potential for digital revenue is substantial, with projections indicating that digital streams could contribute up to 20% of total revenue within the next three years.
Looking ahead, Longhorn Publishers emphasized its focus on market expansion, with plans to enter new markets such as Ghana and expand its presence in West Africa. The company has allocated significant investments towards developing new content tailored to these markets, underscoring its strategic vision to become a leading provider of innovative learning solutions across the African continent.
In conclusion, Longhorn Publishers' impressive recovery and strategic initiatives underscore its resilience and commitment to growth in the face of unprecedented challenges. With a strong financial performance, a focus on digital innovation, and strategic market expansion plans, the company is poised to capitalize on emerging opportunities in the education sector and solidify its position as a key player in Africa's educational landscape.