The Standard Group PLC has issued a profit warning to its shareholders for the period ending December 31, 2019.
Capital Markets Authority regulations require listed companies to give a profit warming to its shareholders if the firm is expecting a decline in profitability.
The firm in a notice to shareholders says, it expects profits to decline by 25% for the year ending December 31, 2019 compared to a similar period in 2018.
The media house says decline in revenue from newsprint is the main contributing factor to this as existing clients spent less during this period including SMEs due to slow economic activity and lack of access to credit from the financial sector.
“The Group invested in several new products which in the immediate period, has affected our costs, but we expected revenues to be realised in subsequent years,” read part of the notice, signed by the Group’s CEO, Orlando Lyomu.
The firm further cites changes to Government’s key regulations in the business environment, which led to exit of some firms from the Kenyan market, key among them, the gaming and betting sector, which saw two major players Sportpesa and Betin exit the market. Also affected by the regulatory changes are the alcoholic and beverage sector, tobacco industry and the education sector that have slowed down on their spending.
“The Board is cautiously optimistic that the Group is able to withstand the changes in the operating environment and is focusing on growing the newly launched media products, which should enable the group to post a better return next year,” concludes the notice.