THE New Vision group chairman, David Ssebabi, has assured shareholders that expansion projects, which the company has undertaken, are near completion and will spur growth.
â€œThe new purpose-built factory has been completed to accommodate the new printery. Engineers are here to install the new ultra- modern printing press, which we expect to be completed by the end of this year.â€
Ssebabi was addressing shareholders during the 8th annual general meeting at Hotel Africana, Kampala yesterday.
Rukia Chekamondo, state minister for privatisation, attended.
Ssebabi said the company posted good performance despite a difficult environment created by the global credit crunch.
He explained that the company generated sh43.2b with a gross profit of sh13b during the year to June 2009. The company also posted a net profit of sh2.1b, lower than sh4.7b the previous year.
Ssebabi noted that advertising generated revenue of sh24.2b, which was higher than the previous year.
The company declared a final dividend of sh1.1b in which sh15 per share will be paid to shareholders.
Commenting about the investment in electronic media, the chairman said the company acquired Radio West, set up Bukedde FM and other radio stations in Gulu and Soroti.
He was optimistic about the future growth of the company, explaining that the coming year would be that of consolidation.
â€œGrowth is projected to come in all revenue streams after integration and the company will be in a solid and better position for future growth,â€ he added.
Responding to shareholder concerns about the companyâ€™s rapid expansion plan, chief execuitve officer Robert Kabushenga said the strategy to go into other media channels was long overdue.
â€œExpansion has demonstrated to us that these are areas of future growth in the media. The fastest growing media is radio and television in terms of audience and revenue across Africa.â€
â€œRadio West has been incredibly profitable, not only because of the revenue generated but also the relationship with Orumuri has increased the paperâ€™s circulation,â€ he told the shareholders.
He said the approach of linking electronic media to existing publications had also increased both the revenue and the circulation for Bukedde newspaper.
Kabushenga attributed the high costs of operation that the company recorded to the expansion plans.
The plans, he said, necessitated investment in human resource and computing capacity, among other areas.
â€œWe have to automate every working process in The New Vision, which requires computing capacity, software and servers.
â€œWe are investing in computing capacity for the human resource to be more efficient and productive. We produce a new product on a daily basis and we need this capacity to achieve this.â€
He added that the timing of the expansion was right to ensure that the company is positioned to take advantage of future opportunities.
Finance manager Zubair Musoke noted that foreign exchange rate fluctuations that saw the shilling depreciate from 1,600 to over 2,000 per dollar also impacted on the cost of sales.
He added that the global downturn forced advertisers to reduce their advertising budgets, which also impacted on the turnover.
New Vision expands into television