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Hotels firm posts 35pc profit rise

TPS Eastern Africa, known for its Serena brand of hotels, posted a 35 per cent rise in net profits on account of its businesses in Uganda and Tanzania. PHOTO/FILE

By  Nation Reporter

What you need to know:

  • The company cites uncertainty in the political environment, travel advisories, escalated poaching in Kenya and Tanzania, and the introduction of 16 per cent Value Added Tax on tourism services as challenges in the hospitality sector.

TPS Eastern Africa, known for its Serena brand of hotels, posted a 35 per cent rise in net profits on account of its businesses in Uganda and Tanzania.

In its financial result released yesterday the Kenyan hotelier profits for 2013 stood at Sh668.5 million against Sh493.5 million announced the previous year despite a challenging environment in the local tourism market.

‘’During the last quarter 2013, Jomo Kenyatta International Airport fire incident, Westgate Mall ordeal and grenade attacks in tourist areas in Mombasa resulted in further anxiety in source markets,’’ said TPS in a statement.

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The company cites uncertainty in the political environment, travel advisories, escalated poaching in Kenya and Tanzania, and the introduction of 16 per cent Value Added Tax on tourism services as challenges in the hospitality sector.

The board of directors has recommended dividend of Sh1.35 per share for the ended period.

“Commendable results when set against a weak tourism backdrop. Serena is regionally diversified which brings some insulation from pure Kenya dynamic which have been soft. This is an undervalued share, in my opinion,” said Mr Aly Khan Satchu, a market analyst on the results.

The company’s turnover grew to Sh6.8 billion, which is a 28 per cent rise compared to 2012’s. Earnings per share fell by 4.1 per cent to Sh3.45 despite the improved profits. This has been attributed to additional shares issued for the acquisition of TPS Uganda.

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