Crown Paints Kenya Limited has announced a 49 percent increase in pretax profit for the year ending 31st December 2013. The paint maker recorded a Ksh 333.4million profit in the year under review compared to Ksh224million in the previous year.
Crown Paints CEO Rakesh Rao attributes the impressive results to the aggressive sales and improved efficiencies that saw the company’s turnover improve significantly from Ksh4.2 billion (2012) to Ksh5.1 (2013) billion.
“We managed to grow our sales despite the high interest rate environment. In addition, year-on-year growth has ranged between 40-50 per cent hence the rise in turnover,” said Rao.
The CEO observed the paint industry had become very competitive as evidenced by increased pressure on margins. “The industry is becoming very competitive from a price perspective. However, our focus on introducing new, innovative products into the market is paying off. We are optimistic about the future,” he said.
With growth of the construction sector averaging 15 per cent over the last six years, Crown Paints has positioned itself to reap from the increased demand for its products especially in the premium category.
“The high-end product market has been growing. Premium category now accounts for 40 per cent of our sales compared to 20 per cent two years ago,” explained Rao.
On regional expansion, Rao said his company was firmly on track to entrench its presence in the region using a unique model of setting up mini-plants that feed demand for specific regions.
“We have aggressive plans to entrench our regional presence. We are putting up satellite factories in Arusha, Mwanza and Dar es Salaam at an estimated cost of USD3 million.”
Crown Paints also plans to increase export in Rwanda, South Sudan and even Somalia.
The directors have recommended a dividend per share of Ksh 1.75 for the year ended 31 December 2013.
As part of its expansion strategy and move to gain from the increased activity in the construction sector, especially in the counties, Crown Paints has spent over Sh100million in the first quarter of 2014 to open showrooms across the major counties in the country including Nairobi, Mombasa, Eldoret and Nakuru.
SOURCES