April 30, 2014 / 8:26 AM / 4 years ago

Kenya's Scangroup sees pretax profit edge lower in 2013

NAIROBI, April 30 (Reuters) - Kenyan advertising firm Scangroup posted a slim fall in pretax profit on Wednesday, although a positive revaluation of its investment in a British firm offset a jump in operating costs.

Scangroup, partly held by advertising and marketing group WPP, said a recovery in the second half left pretax profit down three percent at 1.04 billion shillings ($11.97 million).

The Kenyan firm had posted an 83 percent pretax profit slump in the first six months of the year after political uncertainty surrounding a March 2013 presidential election knocked business activity.

“The drop in operating profit was offset by a gain arising on revaluation of our existing investment in Millward Brown,” Scangroup said in a statement.

Scangroup’s share price traded up 2.67 percent at 48 shillings per share after the results were announced.

Operating expenses rose 16 percent to 3.56 billion shillings on the back of investments in the company’s digital and public relations businesses, Scangroup said.

Costs were driven higher by investments in Scangroup’s operations in other African markets including Ghana and Tanzania.

Earnings per share (EPS) however rose to 2.70 shillings from 2.21 shillings. However, stripped of the revaluation gains, Scangroup’s earnings per share (EPS) plunged 70 percent to 0.63 shillings, it said.

The firm recommended a dividend of 0.40 shillings per share.

The company said it was confident the recovery posted in the second half of last year would be maintained this year, boosting its outlook.

“Unaudited results for first quarter 2014 show revenues are up b 24 percent and EPS is 0.22 shillings compared to 0.10 shillings loss per year during the same period last year,” it said. ($1 = 86.9000 Kenyan Shillings) (Reporting by Duncan Miriri; Editing by Richard Lough)

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