Pre-tax profits climb 12 per cent to Kshs.224 million on improves sales and efficiencies
Thursday, May 2, 2013: Crown Paints has announced a 15 per cent increase in turnover for the year ended 31 December 2012, buoyed by rising demand for new products especially in the premium category, as well as enhanced efficiency in operations.
Increased domestic demand for paint products as well as sustained expansion into the regional market saw the company’s turnover cross the Kshs.4 billion mark, in line with its strategy of growing revenue to over Kshs.5 billion.
The paint manufacturing firm, which is listed at the Nairobi Securities Exchange, also registered a 12 per cent growth in pre-tax profits. Turnover increased from Kshs.3.8 billion in 2011 to Kshs.4.4. billion last year. Profit before tax rose from Kshs. 200,539,000 to Kshs.224,170,000.
Crown Paints CEO Rakesh Rao attributed the impressive results to aggressive sales and improved efficiencies that saw the company’s cash flows improve significantly from Kshs. 301 million to Ksh 405million during the same period.
“We managed to grow our sales by about 10 per cent last year 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.
Rao said the paint industry had become very competitive as evidenced by increased pressure on margins. “The industry is very competitive from a price perspective. Last year, we reduced prices by 5 per cent. However, our focus on introducing new, innovative products into the market is paying off. We are optimistic about the future,” he said.
In April, Crown Paints introduced Medicryl Silk Emulsion, a unique coating solution with anti-bacterial properties and is suitable for hospitals, schools, kitchens and restaurants. The firm has also seen sales of its flagship brand, an easy-to-clean coating solution grow rapidly.
With the 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. The 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.”
The company’s sales in Uganda grew 40 per cent and other export sales by 60 per cent with quality being the main factor driving sales. Crown Paints also has distributors in Rwanda, South Sudan and even Somalia.
The company’s total assets grew marginally from Ksh2.215 billion to Ksh2.25 billion. Earnings-per-share in 2012 was Ksh5.63.
The directors have recommended a Ksh1.25 dividend per share. The company holds its 56th Annual General Meeting on 27th June 2013. Crown Paints was previously known as Crown Berger.
Click to download financial statements
Crown Paints Kenya has sealed a deal with the second-largest manufacturer and supplier of protective, marine, decorative, container and yacht paints in the world, Hempel, to improve supply and technology in the paint industry.
The deal, which follows a series of trade partnerships between Crown Paints and other global companies, was signed by Crown Paints Kenya Chief Executive Officer, Rakesh Rao, and Hempel Director for Africa, Claudio Negri, in Nairobi.
Under the distributor agreement, the two companies will share their supply networks and technology to increase their share of the paints market.
“By sealing a deal with the second-largest manufacturer and supplier of paints in the world, Crown Paints has pulled another rabbit out of the hat. Today we become a player in all sectors of the world paint market,” said Mr. Rao.
Mr. Rao said Hempel will leverage Crown Paints Kenya’s strong local market position and history of quality to enhance its growth.
The deal comes in the wake of aggressive regional expansion efforts by Crown Paints, which has already set up operations in Tanzania and Uganda. In June Crown Paints opened a new plant in Tanzania where it is investing more than Sh250 million as it seeks to establish its footprint in the region.
Hempel has already acquired Crown Paints, UK, as their decorative brand to increase its production volume and widen distribution network across the world.
Last year, Hempel sold 311 million litres of paint up from 247 million litres in 2010 while Crown Paints Kenya’s sales volume rose from 12.4 million litres to 14 million litres.
Hempel, which boasts of 24 factories, 48 sales offices, 150 stock units and ten research development centres across the world, posted a turn-over of 1.1 billion euros last year.
More about Hempel:
- Hempel is a leader in the production and sales of protective coatings within the Decorative, Protective, Marine, Container and Yacht market segments.
- Hempel employs 5,000 people in more than 80 countries.
- Hempel has been in the decorative market for decades and has a strong position in the Middle East, Iberian Peninsula and China.
November 20, 2012: Kathunguini Secondary School in Machakos County has benefited from a fresh coat of paint worth Sh200, 000, courtesy of Crown Paints ‘Transform your world ‘ Corporate Social Responsibility (CSR) Facebook contest.
The school, which was nominated by Mr Patrick Nzomo, was ahead with votes, followed closely by Lodwar Mixed Primary School.
Nominating Kathunguini Secondary School for the contest, Nzomo wrote: “It’s a Harambee school that has changed lives in the community around it. It needs to be given a long-lasting attractive look.”
Crown Paints in its latest example of innovation launched the Facebook CSR contest in September, to leverage on the social connections of the public to nominate a not for profit institution that will benefit from a free paint makeover.
Crown Paints Chief Marketing Officer, John Hadley, said the campaign dubbed, “Transform Your World”, is part of the company’s strategic shift in corporate giving. The paint maker is focusing on sustainable projects that transform the lives of its target market.
“At Crown paints, we believe that small, everyday actions can add up to a big difference; and that the power of social connections can drive real change in the country. We want to leverage the power of the social graph and the ripple effects that each person’s actions can create, to inspire and enrol many more to make a difference,” said Mr. Hadley.
Crown Paints, the leading paint maker in East Africa, has been at the forefront in embracing new technology to improve both service delivery and product offering to its customers.
Recently, the paint maker launched a new brand of paint that would give buildings in any location within the region, whether on altitude or coast, long-lasting exterior finishes.
Crown Permacote surface protector is an advanced 100% pure acrylic and protective paint system that can be applied on all types of exterior surfaces.
Limuru Golf Club chairman presents a Crown Paints gift voucher to Susan Kanyora who emerged as the best lady golfer with 34 points during the golf tournament held at the Muthaiga Golf Club on 14th November 2012 where Crown Paints was the sponsor.
We are the proud winners of the 2012 COYA Financial Management Award. We are grateful to our dedicated staff and you, our valued customer for propelling us forward.
Crown Paints Marketing Manager, John Hadley, follows his tee during the Irish golf competition at the Karen Golf Club, Nairobi. Crown paints partnered with other corporate organizations to sponsor the tournament.
Superbrands project director and associate publisher, Mr.Jawad Jaffer (left), presents a Superbrands certificate to Crown Paints chief executive officer, Mr. Rakesh Rao, at Crown Paints offices in Nairobi today.
Crown Paints was ranked among the top ten brands.
East Africa’s leading paint manufacturer, Crown Paints, has launched a training programme for painters to improve standards in the booming building industry.
The programme, which is part of the company’s corporate social responsibility offering, will impart technical and entrepreneurial skills on painters across the country.
Crown Paints CEO, Rakesh Rao, said the programme will help create a pool of certified painters who can be relied on to offer quality services to the booming building industry.
“Painters form an important link in our value chain and we have designed this programme to equip them with business management skills so that they not only grow in their trade but also contribute to the economic development of the country,” said Mr. Rao.
The modular training includes Painting and Decoration, Entrepreneurship &others.
In an industry infiltrated by quacks who offer poor workmanship, certification of painters will provide proof of the quality of their services to homeowners and building contractors.
“We also want to develop a bond with painters to a level where they understand our products and are able to serve the end-users better,” he said.
Painters who will benefit from the modular training will be selected through a promotion in local vernacular FM stations dubbed Chezea Timu Kubwa.
To qualify for admission to the programme, painters will be required to register by sending a text message with the word PAINTER, full name, ID number and location to the shortcode 5336.
The registration exercise begins Monday, September 17 and SMS will be charged at normal rates.
The second phase of the programme will see the painters come together to form a club through which they will be able to share their experiences.
Click here to view the poster
In its latest example of innovation, Crown Paints has launched a Corporate Social Responsibility (CSR) contest on facebook, which aims to leverage on the social connections of the public to nominate a not for profit institution that will benefit from a free paint makeover.
The unique campaign dubbed, “Transform Your world”, is part of Crown Paints™ strategic shift in corporate giving, with the paint maker now focusing on sustainable projects that transform the lives of its target market.
According to the Group CEO of Crown Paints – Rakesh Rao, fans to the Crown Paints Facebook page, stand to win their institutions a top prize of KShs 200,000 worth of paint job plus Kshs 100,000 cash, if they get the most votes, with the runners-up and second runners-up getting a cash prize of KShs 50,000 and KShs 30,000, respectively.
“At Crown Paints, we believe that small, everyday actions can add up to a big difference; and that the power of social connections can drive real change in the country. We want to leverage the power of the social graph and the ripple effects that each person’s actions can create, to inspire and enroll many more to make a difference,” said Rakesh Rao.
The campaign starts immediately and runs till 22nd October 2012. However, proposals of nominated institutions should be submitted before 30th September 2012.
Crown Paints has always been at the forefront in embracing new technology to improve both service delivery and product offering to its customers.
In the last year alone, the paint maker has revamped its website, to include an Online Paint Shop that makes it easy for its customers to place paint orders and an online paint calculator which enables its customers to find estimates of the amount of paint they require for their paint projects, the site also has an Online Colour Chart which enables users to choose colours before placing the orders through the Online shop.
Crown Paints Junior Golf Foundation held at the serene Muthaiga Golf Club on August 5th and 6th was a showcase of massive talent among the youth.
From the way, the young boys and girls, aged between 12 and 19 years old, swung and hit the balls, there was no doubt that Kenya has the potential to produce world ranking golfers in the coming years.
The keenness with which they kept their eye on the ball easily betrayed their dreams to excel in the game and match big names who have earned fame from the game.
David Nduva, who emerged the champion, could not have put it better when he expressed his admiration for Tiger Woods. Woods is an American professional golfer whose achievements to date rank him among the most successful golfers of all the time.
“My desire is to play like Tiger Woods and win trophy after trophy. I admire the way he swings and hits the ball and I want to work hard so that one day I play like him,” said Nduva after being declared the overall winner at the par 72 Muthaiga Golf Course.
Playing off handicap 4, the Nyali-based golfer posted a Gross score of 303 after successful rounds of 73(1 over), 84(12 over), 72(level [par) and 2 over on the final round.
“I found the greens very fast but the weather favoured my fairway play compared to Nyali where strong ocean winds are a bother. I always opted for a 4 iron on downhill fairways which enabled my tee-shots to be on the fairways,” he said.
Nduva’s last round of 2 over comprised of 3 birdies on par5, par 4 and par 5; 4th, 15th and 18th holes, respectively.
He shot pars on 1st, 7th, 10th, 11th, 12th, 13th, 16th and 17th holes dropping shots on the rest of the holes.
Playing off handicap 26, Nikhil Rawal of Muthaiga Golf Club posted the overall Nett winner after posting a Net score of 254 in successful rounds on 65, 65, 63 and 61 in the final round.
Crown Paints chief executive officer, Rakesh Rao, who graced the awards ceremony brought the dreams of the young players closer to realization when he announced the company will continue supporting the development of golf among the youth.
“Crown Paints will put every effort to ensure that Kenya produces more golfers at the international level and not winners in Kenya alone. This is why we are keen on promoting the development of the game among the youth,” he said. Rao who chatted freely with the players called for a structured approach to developing golf in Kenya and Africa.
The Kenya Youth Golf Foundation, which organized the event, praised Crown Paints for promoting golf events in the country and called on more companies to emulate it.
The Foundation’s trustee, Charles Farar, who won six junior events during his time as a junior golfer between 1950s and 60s, said Kenya is capable of producing juniors who are strong enough to be given a chance to play in the Kenya Open next year.
“Crown Paints has demonstrated its commitment to the welfare of the young golfers by giving them the best sponsorship,” he said during an interview with Brush Strokes at the venue.
