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Corporations
C&G diversification pays off with 36pc income leap
Wednesday Could 18 2022
Diversified buying and selling group Automobile & Basic (C&G) has posted a 36 % leap in half-year internet revenue as gross sales improved throughout its East African markets.
The corporate, which has numerous operations together with poultry, property investments, and the sale of bikes, made Sh629 million in internet earnings for the six months to March 2022, up from Sh461 million comparable interval final 12 months.
Income surged by almost 1 / 4 to Sh10 billion from Sh8 billion a 12 months earlier.
“Our buying and selling operations, notably in Kenya and Tanzania, have seen good progress in turnover however at diminished margins. Our Uganda buying and selling operation has been secure,” stated C&G chairman Nicholas Ng’ang’a in a press release on Wednesday.
C&G cited world provide chain constraints, which resulted in value will increase and longer lead instances for the diminished margins.
“This has been exacerbated by a gradual devaluation of the Kenya shilling which additionally resulted in foreign exchange losses.” The agency booked foreign exchange losses of Sh16 million.
C&G says its poultry enterprise in Tanzania registered vital progress, in addition to its lending arm Watu Credit score. The microlender funds acquisition of the 2 and three-wheeled autos, together with manufacturers comparable to TVS bikes and Piaggio tuk-tuks, which it assembles.
The corporate says it additionally benefitted from leasing the Nairobi Mega property, alongside Uhuru Freeway, to grocery store chain Carrefour in June 2020. Carrefour changed the earlier occupant Nakumatt Holdings, which fell into chapter 11 and was subsequently liquidated.
The listed agency stated its dispute with the Kenya Income Authority remains to be ongoing after the taxman appealed a ruling issued in its favour by the Tax Appeals Tribunal over Sh677 million KRA was demanding as unpaid tax accrued over six years ended 2020.
Learn: KRA now calls for Sh677 million tax from Automobile & Basic
Additionally learn: KRA loses Sh1bn struggle to categorise tuk-tuks as automobiles
The board didn’t suggest an interim dividend payout.
The agency says whereas its diversification is paying off, it expects uncertainties for the rest of the 12 months.
“Given the logistic challenges and the upcoming election in August, the subsequent six months look predictable throughout all enterprise sectors. There are further challenges within the type of gas shortages, foreign exchange devaluations, inflation and growing rates of interest,” C&G stated.
“Our focus will likely be on progress in market share, price management, preserving money, defending margin and growing working capital efficiencies.”
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