Marketing and Communications firm ScanGroup has joined a growing list of Nairobi Securities Exchange (NSE) listed companies to issue a profit warning highlighting tough economic environment facing Kenyan firms.
- Sasini Plc, Nation Media Group earlier issued advisory of a reduction of profit by at least 25 per cent with explanation ranging from recession in key markets, weaker shilling and high cost of fuel prices among other reasons.
- Based on preliminary assessment of its financial results, net consolidated earnings of for Scangroup and its subsidiaries will be at least 25 per cent lower than that reported last year.
“The reason for the lower expected earnings is 2023 is due to a number of reasons including the continued subdued economic environment in our markets of operations that has led to cautious spending by our clients on advertising, marketing and communications,” noted Winniefred Jumba, Company Secretary WPP Scangroup.
“Further, the company undertook a comprehensive restructuring program to right size the cost base and reshape the staff structure, this led to a one-off severance cost of Sh178 million included in operating and administrative expenses,” she said.
- WPP-ScanGroup operates in 25 countries in sub-Sahara Africa and has majority-owned offices in Kenya, Ghana, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and Zambia.
The Nairobi Securities Exchange-listed company posted a profit after tax of KES 75 million for the year ending 31 December 2022, representing a 297% increase compared to the previous year’s loss after tax of KES 38 million.