Car & General profit before tax for the full-year ending September 2016 rose to Ksh150 million, 85% higher than Ksh81 million the previous year, but its management sees elections slowing down growth. Net profit attributable to shareholders increased to Ksh89m from Ksh31million. The earnings per share increased from Ksh0.76 to 2.22. The improved profitability resulted from the stability of the exchange rate.
Overall, the period was challenging, it said. Turnover for the year ending September 2016 was Ksh9.7 billion which was similar to Ksh 9.9 billion achieved the previous financial year. The gross profit was similar to the previous year.
In Kenya, volumes in the consumer business (two-and three-wheelers) were curtailed by government regulations, including excise duty on two-wheelers and a Mombasa County ban on three-wheeler registrations between December and March.
“Whereas our generator businesses continued to grow, growth in our other equipment businesses (construction, tractors and forklifts) has been limited by the prevailing high interest rate regime and the subsequent cap on interest rates,” said Group Managing Director Mr Vijay Gidoomal.
This notwithstanding, new product lines – namely Doosan construction equipment, Kubota tractors, Toyota forklifts and MRF tyres – are gaining traction and will provide more balance to the business going forward. The company now has a complete product line up with good balance, a solid infrastructure and an expanding distribution network.
“”Trading conditions this financial year are unpredictable given elections, current risk aversion and constrained liquidity conditions. Our focus will be on limited growth and operational efficiency,” said the Group Managing Director Mr Gidoomal. “In view of the lack of growth during the year and increased working capital requirements, the directors have resolved not to recommend a dividend to shareholders at the Annual General Meeting to be held on 22nd March 2016.”