TransCentury cuts loss by 46% as turnaround gains traction

TransCentury PLC on August 28th 2018 announced its financial results for the six months period ended June 30, 2018.

The Group recorded a significant improvement in gross profit margins from 14% in 2017 to 27% in the period under review attributable to operational improvement and disciplined allocation of capital supported by the Group’s unique product offering and positioning.

 “Improved performance in the first half of the year has been achieved on the back of a tough liquidity environment,” said Mr Ng’ang’a Njiinu, TransCentury Group CEO and Managing Director.

“We, however, continue to focus on the implementation of our turnaround plan that includes the re-profiling of debt and securing additional working capital funding. We believe the Group is well set to realize the benefits of the pent-up value in the order book,” 

Results of the ongoing turnaround plan – whose focus includes delivering a robust and fundable order book, debt re-profiling to match cash flows, fundraising and efficient execution of order book – are already evident in the Group’s delivery of an unprecedented confirmed order book in excess of Ksh26 billion at the start of the year, a 62% growth from 2017.

Overall, the group has recorded a 46% reduction in loss before tax demonstrating traction in turning around the Group’s performance.

Mr Njiinu said TransCentury continues to benefit from improved efficiencies and financial discipline reducing the group’s operating expenses by 20%. This has led to it reporting growth in gross profit by 54%. The improved gross margins in 2018 are also indicative of the existing demand from the Group’s markets and ability to allocate resources to high margin order book.

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Following the completion of company debt re-profiling in quarter 2, the benefits are starting to accrue with an overall 12% drop in finance costs. The debt re-profiling focus has now shifted to the operating units and to date, debt in one key unit has been fully refinanced and enhanced giving access to the required additional working capital.

 “TransCentury remains strongly anchored on its competitive advantage that includes; unrivaled capacity, a robust order book and an innovative and entrepreneurial team,” said Mr Njiinu.