Vision Group announces UGX396.5 million half-year profit comeback, on the back of 52.5% growth in turnover
More importantly, the fundamentals underlying the modest profit, signal the start of the business’ journey to recovery from the pandemic impact that hit circulation, advertising and commercial printing earnings.
Kampala: Vision Group, Uganda’s largest media conglomerate, announced on Tuesday, that it had made UGX396.5 million in half-year profits, for the 6 months to December 2021.
This is a 129% recovery from a loss of UGX1.37 billion registered in the same period in 2020.Although modest, the profit and the fundamentals underlying it, signal the business’ recovery from the pandemic which hit circulation and advertising earnings.
The results are also Don Wanyama’s first half-year results as Chief Executive Officer, since his appointment in April 2021 as the Group’s head.In the public announcement by the Group, it was reported that overall turnover grew by 52.5% from UGX40 billion to UGX61.1 billion, backed by a bounceback in the publishing business as well as 9.81% growth in advertising revenue.
The Group said that its publishing business had been boosted by a large publishing and distribution order from the Ministry of Education for Home Schooling and Upper Primary textbooks.
Television advertising, radio advertising also made a good double-digit comeback, growing 14.93% and 12.58% respectively.
However, print advertising revenue which is the cash-cow, remained depressed, growing by just 1% from the same period last year.Commercial printing revenue fell 9.76% as more clients either cut down budgets or turned to digital publishing. Circulation revenue from selling newspapers, also declined by 12.27%.Vision Group, remains the market leader in the newspaper business.
According to the Audit Bureau of Circulation’s April-June 2021 report, Bukedde continues to lead the print market with a total paid circulation of 29,782 copies followed by New Vision at 19,106 copies and Sunday Vision at 12,182 copies.
The Group’s newspapers are the only paper that subscribes to the independent circulation monitoring agency following Nation Media Group’s pulling out of its Daily Monitor and Sunday Monitor titles.
The Ipsos National Audience Measurement Survey (NAMS) estimated the readership market for newspapers at 1,630,000 readers. Out of these Bukedde held 60.62% while New Vision held 58.56% and Daily Monitor 31.77%. Red Pepper held 20.43% while Daily National had 11.34%.
The company also reported that it had borrowed UGX 29.2 Billion from Stanbic Bank for a year term to facilitate the printing of educational materials and stabilise cash flows.
A repayment of UGX 7.77 billion has been made leaving a balance of UGX 21.45 billion outstanding as of December 31, 2021.
Vision Group resumes trading on the bourse
Vision Group’s come-back to profitability- after a bruising 2021, should be greeted with optimism by shareholders, who will also be glad to learn that company shares have resumed trading on the bourse.
Following the Uganda Securities Exchange’s lifting of the suspension in trading that was announced on 11th February 2022. Shares started trading on 22nd February 2022.
In a notice to all stakeholders, the USE announced that: “Upon further inquiry into the trading activity on the counter between 1st January 2022 and 10th February 2022, it has been established that the price volatility on the counter was artificially created by a series of transactions emanating from a single seller and not a true and fair representation of market forces of demand and supply.”
“Whereas the Exchange recognizes that some transactions may have an impact on shares prices; if they have been executed in accordance with the market rules and regulations, and where there is legitimate commercial rationale – such transactions meet the market standard of fair trading. The Exchange in consultation with the Capital Markets Authority- Uganda is pursuing the necessary action against those actors cited in the irregular trading activity.
Trading participants are advised to notify their clients of the reinstatement of trading on the NVL (Vision Group) counter,” the USE’s Chief Executive Officer, Paul Bwiso wrote on 22nd February 2022.