Blog Archive

Friday, July 28, 2006

Olympia Capital Holdings Ltd (OCH) releases 1H 2006 Results

The Interim 1H 2006 results were released in record time (within 30 days of the end of the Half Year) at the 2005 AGM held at Nairobi Club on July 28 2006.

The shares have been trading around the 16/- mark for the past few months.

OCH is a Holding Company & owns/controls the following:
  • 100% of Dunlop Industries Ltd (DIL) which is a Kenya based manufacturer of PVC tiles & rubber solutions.
  • 53% of Olympia Capital Corporation (OCC) which in turn owns 100% of Kalahari Floor Tiles (KFT) a Botswana based manufacturer of PVC tiles & rubber solutions. KFT also supplies the S.African market. KFT has a chemical division acquired in 2006 that manufactures & distributes industrial cleaning solutions.
Other Info:
  • Chairman - Chris Obura
  • CEO - Michael Matu
  • 10 Million Shares in issue
  • OCC is listed on the Botswana Stock Exchange
  • DIL is the sole PVC tile manufacturer in the East African region
My comments in BLUE.

The growth in profits was limited to Kenya but generally Botswana provides the bulk of the profits.

The info is for 1H 2006 vs 1H 2005

Turnover: +9%
PBT: -1%
PAT attributable to OCH: +41% (primarily due to lower "minority interest charge")
EPS: +41%

The 1H EPS is almost the same as the entire 2005 (1.13 vs 1.14) therefore OCH can do much better in 2006 vs 2005 if they maintain the current "streak".

CEO's Commentary (per the Announcement):

During the six months under review, we did not see a significant improvement in the group profitability before tax. The key difference in the results was an improvement in the Kenyan operations where we own 100% of the equity versus a decline in the results of the Botswana operation where we own 53% of the equity.

Prior to any acquisition we expect the second half of the year to be similar to the first half.

Our Botswana subsidiary is in the final stages of making a significant acquisition in South Africa. This acquisition, if successful, will have a significant effect on the profitability of the company. We will make every effort to meet our equity funding requirements to retain majority shareholding in the subsidiary during the acquisition. We expect this acquisition to be complete during the second half of the year.

Michael Matu

The South African Acquisiton:

  • The cost of the acquistion?
  • Will it be accretive to earnings in 2006?
  • Ownership structure?
  • How much will OCC need to to acquire the SA firm?
  • OCC plans to raise the funds by acquiring debt & raising equity i.e. Rights Issue
Since OCH intends to maintain its "control" in OCC & replace the aging Kenya DIL plant (2005 Annual Report), it will need to raise funds to fulfill both needs.

Bottomline:

OCHL's 2005 AR states that "Our aim will be to meet our rights to ensure we maintain majority shareholding in our Botswana listed subsidiary" thus raising the bar to meet funding for the DIL plant & OCC Rights. The new plant is expected to increase DIL's profitablilty.

4 comments:

Kibet said...

Great stuff. We probably wouldn't have found this info anywhere else. In view of the imminent SA acquisition and increase in Botswana shareholding, and the rest of the info you've availed, i'd say on a whole that it would be nice to park some cash there for like 1.5 years.

coldtusker said...

They don't have a website. Send me your e-mail & I will e-mail the announcement.

I wish the NSE would scan them all in & have them for all to access. I suggested it to them but no response!

gathinga said...

Thanks tusker for this update...
This comapany is an intrigue. Everything seems to be done insecrecy. for now wish bwe could get the following info.

Who has management control?
What % of their turnover and profits are attributable to kenya?
what's the market for pvc tiles like?
Are there any imported pvc tiles competing with them?
Whats their distribution chanels like.... coz i've never heard of them in the market.


this is basic info which investors shoudhave

coldtusker said...

Fact: Sales (2005) are 18% (Kenya) per 2005 Annual Report. Your broker should have a copy for further details. Not broken out for 1H 2006.

Opinion/Comment. Apparently Kenya operations made loss in 2005 but profits in 1H 2006. Per the commetaries by CEO/Chairman.

Opinion/Comment: Management control is local.

Fact:Dunlop Properties 38%, Eliud Wamae Matu 2%, CEO: Michael Matu

Opinion/Comment: I have seen imported tiles but common for most goods e.g. beer (Windhoek & Heneiken), shoes, furniture, cars, etc. Just go to Nakumatt! We even import butter & eggs! I don't understand Kenyan... we import everything even when Kenyan goods are reasonably priced & of comparable quality!

Opinion/Comment: Dunlop PVC tiles are the most popular PVC tiles esp in the industrial market. Their office is in Avon Centre on Enterprise Road in Nairobi. I am sure they have other distributors.