Express Kenya Ltd earnings update for year ended 31st December 2014

By / May 4, 2015

nse

Express Kenya Ltd (NSE:XPRS) announced their audited financial results for their full year ended 31st December 2014 on 28th April 2015.

Depressed Performance: Revenues cut by more than half in FY14

The logistics and transport firm reported a 55.35% slide in their revenues for the preceding year 2014 mainly attributed to the aftermath of losing the key East African Breweries Limited (EABL) distribution business in 2011. The company lost other key undisclosed contracts in the course of last year which was aggravated by theft at its warehouses, exposing it to huge legal liabilities. This led to a gross profit margin of 18.41%, 50.28% drop in gross profits.

Suppressed Margins; 44.17% PBT Margin and 44.70% PAT Margin

Express reported a net profit of KES 0.23Mn in 2013 followed by a net loss of 77.35Mn in 2014. The revenues were eroded by higher administrative and other operating expenses which grew 28.8% from KES 73.2Mn in 2013 to KES 94.3Mn in 2014. The company reported a Loss per Share of KES 2.18 for the year ended December 31st, 2014.

Outlook: During the last AGM the company expressed interest to diversify into real estate. So far the plans are in full gear with the ground breaking expected to take place in 2Q15.Initially the project will be geared towards residential houses. They will oversee the building of approximately 224 units for the next 4-5 years of the projects lifespan, however the initial phase of the project is expected to be completed within 18 months. The company portends to move into renewable energy with partnerships already established between themselves and UN-Habitat. The company did not recommend any dividend for the year. We expect that the diversification plan will offer reprieve to the shareholders in the coming years once they commence generating returns from the real estate project.