Hello

Your subscription is almost coming to an end. Don’t miss out on the great content on Nation.Africa

Ready to continue your informative journey with us?

Hello

Your premium access has ended, but the best of Nation.Africa is still within reach. Renew now to unlock exclusive stories and in-depth features.

Reclaim your full access. Click below to renew.

Subscribe for a month to get full access

Premium

Global firm takes giant stake in Scangroup

Bbharat Thakrar, CEO Scangroup. A transaction to increase the stake of global communications company, WPP, in Scangroup, a media services firm is now complete. PHOTO/FILE

By  NATION CORRESPONDENT

What you need to know:

  • Analysts say the deal now puts Scangroup on a growth trajectory following disappointing half-year results.
  • On Wednesday, WPP appointed Jon Egger as the new chief financial officer (CFO) for Scangroup, making it the first high ranking appointment after getting a major stake in the media services company.

A transaction to increase the stake of global communications company, WPP, in Scangroup, a media services firm is now complete.

The Sh1.8 billion deal, which was executed through Cavendish Square Holding has raised WPP’s shareholding in Scangroup to 50.1 per cent from 33.616 per cent. Cavendish Square Holding is a wholly owned unit of WPP.

Scangroup, yesterday, said the transaction has “been successfully completed”, all additional 94,075,974 shares issued by the firm having been fully paid for.

Also Read

The Nairobi Securities Exchange listed the additional shares on the main investment segment of the market yesterday.

Analysts say the deal now puts Scangroup on a growth trajectory following disappointing half-year results.

“With the controlling stake, WPP now brings new ways of improving the business. The company (Scangroup) is now better grounded to improve and expand its operations,” said Old Mutual’s market analyst Eric Munywoki.

In the first half of the current accounting year, Scangroup posted disappointing results due to a decline in revenues, low operating margins, lower interest income and severance and legal cost in its Nigeria unit.

The firm reported Sh43 million profit after tax in the six months to June this year compared to Sh403 million recorded in the same period last year.
Already, the management has undertaken various cost-saving measures, which include restructuring and consolidation of its business, benefits of which it expects will accrue in the second half of this year.

The company also expects to deliver operating profits similar to 2012, with the exception of the Nigeria charge.

On Wednesday, WPP appointed Jon Egger as the new chief financial officer (CFO) for Scangroup, making it the first high ranking appointment after getting a major stake in the media services company.

Mr Egger will officially take over from Manish Kumar Shah as the CFO in January 2014.

In the headlines