The Standard Group Plc posted made a loss of KSh 484 Million in its 2019 financial year compared to a profit of KSh 261.3 Million recorded in 2018.
This was attributed to a macroeconomic environment that made it difficult for the media industry to operate. Key among them, unpredictable regulatory policy environment in the form of increased. taxation in the gaming industry.
“Regulatory changes which came in the form of increased taxation in the gaming industry and the review of watershed hours had a particularly significant effect. These regulations had a negative impact on advertisement from the entertainment industry.”
“Ultimately, the Group had to contend with decreased marketing and advertising spend that resulted in a decline in revenues compared to the prior year 2018. This was in addition to continued investment in digital platforms and in content improvement as it constantly seeks to align with ever-changing customer preferences.”
Further, the Group costs rose as a result of investments in new products that are expected to break even in year two. During the year, it invested in new niche channels are Spice FM, Vybes Radio, KTN Farmers and Burudani TV.
The company also launched two print products, Pulser and Travelog.
The Group’s turnover dropped 14% to Ksh4.1 billion in 2019 compared to Ksh4.8 billion in 2018.
Direct costs increased 21 percent, closing at Ksh1.46 billion from Ksh1.22 billion in 2018 while other overheads remained constant at Ksh3.3 billion compared to Ksh3.2 billion in 2018.
The company said they will continue with its innovation strategy through the creation of new products and revenue streams to withstand both existing and future macro and microeconomic challenges. “In the long term, we are confident that we will return to profitability. The Group will therefore continue to implement its strategic plan, deepen its engagement with customers and offer more niche products and services that are responsive to market needs”
Standard Group Kenya Issues Profit Warning on Increased Costs
