The Standard Group appears to be sliding deeper into red territory, with strong signals of financial constrains emerging. First, the company, which publishes Standard newspapers and runs KTN, is having difficulties paying its staff, the core engine of its media business.
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Most employees from editorial, management and other departments have been experiencing salary delays over the past few months attributed to cashflow issues caused by a reduction in revenues, growing debts and fraud. Hardest hit are correspondents who have gone for months without payment.
“It’s 6th of May,” a junior employee of Standard told BT recently. “A huge number of Standard Group staff has not received their salaries. Some received their pay slips almost thrice on Thursday but no money. A few have, however, been paid.”
Soon after a staff protest to HR, the Standard Group management was forced to acknowledge the problem, with management sending out a memo over the issue to forestall a rebellion that had began to build up silently.
“As you may be aware there has been delay in paying salaries for senior staff,” an internal memo sent by the HR manager on 6th May says. “Finance are doing everything possible to pay the salaries soonest by mid next week.”
It is understood that the company resorted to paying workers in batches, with a good percentage yet to receive their April salaries. Another group is set to be paid today, 16th May 2022.
Standard, listed at the Nairobi Securities Exchange, has been struggling to stabilize its finances over the past five years by cutting its wage bill and increasing revenue streams. The company, however, continues to record huge losses from its businesses which include, Standard newspaper, The Nairobian, 4 TV stations and several radio stations.
Standard Group posted a net loss of Ksh61.2 million in the first half of 2021, an improvement from a net loss of Ksh306 million in the same period in 2020, giving hope for a return to profitability at the end of the year. “The operating environment continues to improve, with key clients gradually increasing their advertising budgets, while recently launched products have continued to increase their contribution towards revenue growth,” Standard Group said in its financial report.
Yet delays not only in salaries but also in releasing its full-year financial results for 2021 are raising fears that the loss could have ballooned to worrying levels. On 29th April issued an advisory to delay the release of its full-year financial statement for the year ended 31st December 2021.
“The delay in publishing the company’s audited financial statements has been occasioned by unexpected delays in conclusion of the company’s external audit which has affected the company’s ability to comply with regulatory timelines,” said Standard Group company secretary, Ms Millicent Ng’etich, who added the Capital Markets Authority (CMA) had approved its request to publish its results by 31st May.
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It’s not been an easy walk for Standard Group, Kenya’s second largest newspaper company. In 2019, it was forced to issue a profit warning, a low moment for a listed company. This was the third profit warning – cautioning investors that profitability will fall significantly – in five years, having issued another in 2017.
The 2019 profit warning saw the company report a net loss of Ksh484 Million (and Ksh684 million before tax) for the full-year compared to a profit of Ksh261.3 million in 2018. The following year, in 2020, pretax loss reduced to Ksh434.4 million after a turbulent season headlined by Covid-19 pandemic.
Standard Group has rolled out the new radio stations and two TV stations in 2019. The company projected that it would take two years before the investments become profitable. These new niche channels are Spice FM, Vybes Radio, KTN Farmers and Burudani TV. The media outlets joined a crowded industry with cut-throat competition for viewers and listeners and are yet to break even almost three years later – both financially and in terms of market share.
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Given this trend and a profit warning to boot, the 2021 results may not look pretty. Some employees, worried about this slide, are bolting out for better opportunities. Over the past one year, Standard Group has lost a number of journalists to rivals, leaving Mr Ochieng Rapuro, the editor-in-chief, in a very precarious situation.
Recently, political reporter Moses Nyamori dumped Standard for Nation Media Group. Nyamori resigned early April, just a month after City Editor Roselyne Obala left to join NMG as assignment editor. This left the Daily Edition of the Standard without a senior reporter, four months to the general election. Weekend Standard has only Jacob Ngetich left as the senior reporter.
In February, KTN lost news anchor Akisa Wandera to BBC, while Ben Kitili, Lofty Matambo, and Linda Ogutu, all prime-time news presenters, quit last year. The exits are blamed on iron fist management of the editorial department and deteriorating financial performance.
Good From Far, Far From Good
Standard’s HR department led by Nicholas Siwatom is having a nightmare managing staff expectations and an even bigger problem when recruiting as the group is increasingly becoming unattractive to top talent. Now there is a crippling shortage of staff especially in TV output.
Two and a half month to the polls, the state-of-the-art studio that the CEO, Mr Orlando Lyomu, launched has stalled, over five TV cameras are damaged and most bureaus don’t even have lights and other necessary equipment, insiders tell BT.
Few weeks ago, Ng’ang’a Mbugua, who had joined Standard newspaper as editor, quit few months into the job to take up a senior position as People Daily, owned by Mediamax Network.
“Standard is good from the outside,” said a senior editor, who requested no to be named. “Once you get in the mess becomes all clear. Even as many desire to join Standard, many want to exit.”
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