Tension is high tension within Standard Group top management as the board meets today to chart a new direction for the media company. It is understood the board has been meeting since morning and top on the agenda is the continuous poor performance by Kenya’s second biggest newspaper company.
The meeting comes at a time when rumours are flying around Standard Centre that the CEO, Mr Orland Lyomu, could be fighting for survival after failing to lift the company out of its financial rut over the past few years.
Mr Lyomu’s lowest moment came in April this year when he announced a record loss before taxation of Ksh1 billion for the year ending 31st December 2022 from a loss of just Ksh22 million in 2021. This was the biggest loss in its 120-year history.
The loss turned the spotlight on Mr Lyomu, whose tenure since 2017 has had a short supply of good news for Standard Group, which runs the Standard newspapers, The Nairobian weekly, KTN television stations and Radio Maisha among other media outlets. Lyomu, who was chief finance officer, replaced Sam Shollei.
Mr Lyomu blames the drastic loss to an increase in the provision for expected credit losses, due to pending government bills and provisioning for servicing debt. Standard Group is weighed down by huge loans, with cost of servicing its financing rising to Ksh215 million in 2022 – over 20% of its loss – against Ksh162.8 million in 2021.
While net loss for the year was Ksh865 million, it is even more worrying that Standard Group’s current assets – just at Ksh1.6 billion – are three times less than its current liabilities of Ksh4 billion. Technically, the company is insolvent, and therefore in need of Ksh1 billion to keep it afloat.
Worse, the company has had difficulties paying its employees and has been forced to stagger salaries over months. A deep payroll cut in January has not been able to save it from its financial fix.
The board is looking at the company’s prospects and whether it should continue having it bleed in Lyomu’s hands or find a new CEO who can get it from the ICU. Mr Robin Sewell, who was chairman of the board, left in April, setting up Standard Group for a management shakeup.