CAR & GENERAL (KENYA) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 MARCH 2015


Zoomed out

Add to the growing list of monkeys.

Foreign Exchange losses are going to hit many Kenyan firms that:

1) Are net importers
2) Have regional operations as most African countries have useless currencies unlike. Zim which uses the USD.
3) Have forex loans
4) Can't pass on the forex cost/loss to customers.

It's tough being in business in Kenya (among other African countries) hence the required rate of return is much higher than USA or Germany.

There are 3/4 things that should cheer the shareholders. -C&G is still growing volumes and growing them fast relative to GDP which were 12% (net of CoS).
-Gross margins therefore remain strong despite the fact that a lot the machines it then sells are imported.
-Given its regional focus, its a surprise that fx took a bite. However up until end of March, the Ksh was outperforming regional currencies many which are not even managed. Now Ksh is has fallen so my expectation is that we'll see a better performance in H2.

-There are elements that can be controlled like interest expense and admin expenses should things not pick up.

This is a share that performs well on paper but gives measly returns to the non controlling shareholders. If I was a shadeholder, i would want to examine loans from directors, preference shareholding, directors fees and related company sales.