Crown Paints
Crown Paints Kenya Ltd is a Kenya-based company engaged in the manufacture and sale of paints, adhesives, decorating sundries, polyvinyl acetate (PVA) emulsion and alkyd resins.
The Company operates through segments, including paints and adhesives.
The paints segment manufactures and sells paints, decorating sundries, PVA emulsion and produces alkyd resins.
The adhesives segment manufactures and sells adhesives.
The Company has depots and showrooms in Nairobi, Mombasa, Kisumu and Nakuru.
The Company has a factory in Uganda, which manufactures Regal Paints.
The Company has two depots in Tanzania, namely Dar Es Salaam, Arusha and Mwanza.
The Crown Automotive division manufactures under the brand Duco.
Its decorative range consists of products that are used within all residential houses, factories, office and public buildings for the purpose of decoration and protection.
It also offers industrial paints, automotive paints, intermediate products, road marking paints, thinners and adhesives.
News
Crown Paints plans to open a KES 400 Million plant in Kisumu in January. The aim of this expansion is in order to cut costs, increase output and capture the growing real estate in the western part of Kenya.
The company will supply all the counties in the area from the new plant that will be fully automated with a capacity of 1.3 million litres per month. 40% of revenues comes from this region.
Some real estate projects which are planning to come in the region are:
- •Cormandele Investment Ltd (Swedish Developer). Plans to develop 30 villas.
- •Home Afrika plans to build a gated community. It has acquired 72 acres of land.
- •National Housing Corporation is planning to put 3000 housing units using the proceeds from the KES 5 Billion Bond.
Financials
For the six months ended 30 June 2015, Crown Paints Kenya Ltd revenues increased 15% to KES3.31B.
Net income decreased 77% to KES25.1M.
Net income was offset by Other Operating Expense increase by 18%.
Basic Earnings per Share excluding Extraordinary Items decreased from KES1.54 to KES1.06.
The results were affected negatively due to their expansions and foreign exchange losses.
Top Ten Shareholders
- •CROWN PAINTS AND BUILDING PRODUCTS LIMITED – 48.06%
- •BARCLAY HOLDINGS LIMITED – 13.63%
- •BEAUMONT PROPERTIES LIMITED – 13.61%
- •LANSBURY LIMITED – 5.86%
- •PAUL WANDERI NDUNGU – 1.21%
- •MAHENDRA DAHYABHAI PATEL – 0.94%
- •MAHENDRA FULCHAND GANDHI AND MRS MALVIKA MAHENDRA MAHENDRA GANDHI – 0.85%
- •KANAKSINH KARSANDAS BABLA & SANDIP KANAKSINH BABLA – 0.43%
- •DSL NOMINEES LTD A/C ORCHARD ESTATE LTD – 0.39%
- •CROWN PAINTS AND BUILDING PRODUCTS LTD – 0.36%
Share Price
On Monday 30 November 2015, Crown Paints closed at 58.50, 73.76% above the 52 week low of 33.67 set on Apr 21, 2015.
Crown Paints is up by 43.85% Year to Date. It has a Beta of 0.8675
Commentary
Crown Paints has surprisingly been up by 43.85% YTD. Considering that their half year performance was surely not the best by far. However they have maintained profitability.
Crown Paints has an expensive P/E ratio of 70.482. This does not reflect their performance and we think this counter has been overvalued.
Currently Crown Paints passes only one of our key metrics i.e. profitability, however this declined by a whopping 77% in their half year ended June 2015.
We believe entering the market at this instance may not be the best idea. Your thoughts?