Robust business units see NMG post $41.8m profit before tax

Nation Media Group (NMG), East and Central Africa’s largest media firm, has posted a 20 per cent rise in its dividend payout after it reported a Ksh3.6 billion ($41.8 million) profit before tax for the year ended December 2013.

Chief executive officer Linus Gitahi told investors on Thursday that NMG’s profit before tax grew 2.4 per cent to Ksh3.6 billion ($41.8 million), on an 8.3 per cent revenue growth to Ksh13.4 billion ($155.8 million).

NMG directors recommended a dividend payment of Ksh10 ($0.11) per share; the media house will pay out Ksh1.9 billion ($22.09 million) to shareholders.

Though the dividend per share has been kept at the same level as last year, the company will pay Ksh314 million ($3.65 million) more to shareholders, having issued a bonus of one share for every five held in 2013.

“We are confident about the company’s performance and that is why we are keeping the dividend at Ksh10 ($0.11) per share,” said Mr Gitahi. “However, the total cash payment to shareholders has actually increased by 20 per cent.”

Shareholder funds grew from Ksh7.3 billion ($84.8 million) to Ksh8.2 billion ($95.3 million) in the reporting period — a margin of 12 per cent — while the company’s cash pile stood at Ksh4.1 billion ($47.6 million).

NMG’s share price stood at Ksh323 ($3.8) at the close of trading on Thursday. This means that the share price has appreciated by 35.7 per cent in the year to date, making it one of the most sought-after stocks at the Nairobi Securities Exchange (NSE).

NMG’s performance was driven by robust outcome in a number of business units, led by its Kiswahili TV channel QTV whose revenue grew by 117 per cent and 54 per cent operating profit growth.

Advertising revenue at Nation Newspapers Division grew 12 per cent.

“Despite the impact of the General Election and the recently introduced VAT, the underlying individual businesses did very well,” said Mr Gitahi.

He paid special mention to the performance of Nairobi News, the latest addition to the company’s newspaper portfolio. The newspaper, which was launched in November and targets Nairobi residents, offers informative news from the county.

While the circulation of the print version is growing, the newspaper’s website is recording 500,000 unique visits per month. This growth is in step with that realised by the group’s digital division where online advertising went up 27 per cent.

“We are investing heavily in the digital division since we know it is the next frontier,” said Mr Gitahi. “The performance of this division is proof that the move to digital is extremely beneficial to us and in line with our goal of digital first.”

The CEO said the company will remain focused on innovating as well as improving its products already in the market.

Mr Gitahi added that the company fully supports digital migration and expects to benefit from the increased footprint for its two television stations NTV and QTV.

The stations are available in a third of the current available locations, but with digital migration coverage is expected to increase significantly.

Additions to NMG platforms in the recent past include the Governors Summit, first aired on NTV in January, and Seeds of Gold, the agri-business magazine recently introduced in Saturday Nation.

NationHela, NMG’s prepaid Visa debit card, now has 14,000 users.

Mr Gitahi said plans are underway to install a new printing press. In Kenya, the group publishes the Daily Nation, The EastAfrican, Taifa Leo, and the Business Daily newspapers and runs two radio stations, Easy FM and QFM and two TV stations, NTV and QTV.

In Uganda, the company operates NTV Uganda while its subsidiary, Monitor Publications, publishes the Daily Monitor newspaper, the Monitor Telephone Directory, and runs KFM radio station and Dembe FM.

In Tanzania, the company operates through its subsidiary Mwananchi Communications Ltd, whose print publications include Mwananchi, Mwanaspoti and The Citizen.