On 2nd Sept. 2024, the Standard Group held its 106th annual general meeting, during which shareholders were given an update of the company’s performance. While the investors were not all too optimistic, the main agenda was how The Standard Group plans to raise Ksh1.5 billion through a rights issue.
A rights issue is when a company offers its current shareholders the chance to buy more shares at a discounted price. Companies most commonly issue a right offering to raise additional capital to meet its current financial obligations.
The funds are expected to lift the media house out of its current financial straits — which climaxed with a Ksh1 billion loss in 2023 — by rebalancing its operations in the midst of a restructuring in an industry undergoing a paradigm shift.
Listed at the Nairobi Securities Exchange (NSE), and 120 years in the industry, The Standard is hanging on every thread for survival. Even then, the board is more optimistic, saying turnaround efforts are bearing fruit and expect the firm to turn a profit in 2025.
Mr Julius Kipngetich, Standard Group chairman, said at the AGM the reforms the company has implemented this year, including installing new leadership, would turn around the business. “We have a new leadership team, which has done a lot of work in 2024 and look forward to greater profitability and business opportunities in the years to come,” Mr Kipngetich said.
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“We have seen new directors join the board. At the management level, through a very rigorous recruitment process, we have brought on a new chief executive and we believe she will continue on the reforms that have already started and in 2024, some of those reforms have begun to bear fruits.”
He said as from September 2024, The Standard Group will focus on returning to profitability as reforms are undertaken to strengthen its different brands. “We have also reorganised our channels, KTN Home and KTN News have been merged into one channel. We have also closed one of the radio stations that has not been performing and we will continue to strengthen the remaining radio stations which are doing very well in their market segments,” Mr Kipngetich says.
Extremely positive outlook
Mrs Marion Gathoga-Mwangi, who took over as chief executive at Standard Group in August, is bullish about the company’s prospects, saying soon turbulent times would be over. “September outlook is extremely positive and we believe that in a short while, maybe in a year or so, we will come back to you in a good position by just taking these innovations a notch higher.”
Facing a financial problem, the company is pushing out 300 employees, hoping this will save it money.
Joe Munene, managing director broadcast, who also acted as CEO for a year, noted that 2023 was characterised by numerous economic uncertainties that included the spillover effects of high inflation seen in 2022, a weakening shilling that dipped to a low of 157 to the US dollar in December and debt-related risks.
Despite the tough operating environment that adversely affected the media sector, some of the reforms that the company had initiated started bearing fruit, resulting in the company significantly reducing losses to Ksh722 million from Sh1 billion reported in 2022. “In response to the evolving market landscape, we have undertaken various cost-cutting initiatives to streamline operations and ensure sustainability.
This include a staff rationalisation to optimise our resources and maintain financial health, he said.
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