22nd February 2019
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Company Data
 
Car & General (Kenya) Ltd.
http://www.cargen.com/
Par Value:                  5/-
Closing Price:           24.00
Total Shares Issued:          40103308.00
Market Capitalization:        962,479,392
EPS:             5.35
PE:                 4.486
 

Franchise holder for leading automotive and engineering products.

Car & General (Kenya) Limited FY 2018 results through 30th September 2018 vs. 30th September 2017
FY Revenue 10.079734b vs. 9.635150b +4.614%
FY Cost of sales [8.513513b] vs. [8.184936b] +4.014%
FY Gross profit 1.566221b vs. 1.450214b +7.999%
FY Other income 89.531m vs. 257.508m -65.232%
FY Gain in fair value of investment properties 339.513m vs. 229.496m +47.939%
FY Selling & distribution costs [576.570m] vs. [622.406m] -7.364%
FY Administrative expenses [748.344m] vs. [739.836m] +1.150%
FY Finance costs [353.182m] vs. [407.625m] -13.356%
FY Net FX Gains/ [Losses] 4.361m vs. [61.878m] +107.048%
FY Share of profit/ [Loss] in an associate 28.504m vs. [1.221m] +2,434.480%
FY Share of profit/ [Loss] in joint venture 7.777m vs. [5.947m] +230.772%
PBT 357.811m vs. 98.305m +263.980%
Profit for the year 225.716m vs. 79.841m +182.707%
Basic and diluted EPS 5.35 vs. 1.71 +212.865%
Total Assets 10.173507b vs. 9.267544b +9.776%
Total Equity 3.603966b vs. 3.357807b +7.331%
Cash & cash equivalents at the end of the year 61.817m vs. 258.353m -76.073%
Dividend per share 0.80 vs. 0.60 +33.333%

Car & General (Kenya) PLC Final results 30 September 2018 commentary

Turnover for the twelve months to 30 September 2018 was KSh 10.079 billion. This represents an increase of 4.6% over the previous financial year which included Cummins sales before the formation of the Cummins joint venture. Excluding Cummins sales, like for like sales were 18% above the same period in the previous year. Earnings before interest and tax were 40% higher than the previous year at Kshs 711 million as compared to Kshs 506 million. The group made a profit before tax of Kshs 358 million against a profit of Kshs 98 million over the same period last year. This includes the impact of investment property valuations.
In Kenya, volumes in our consumer business (two wheelers and three wheelers) made good progress. However, due to the restriction on bank financing result from the interest rate cap, volumes in our equipment businesses (generators, construction equipment, tractors and forklifts) remained constrained.
In Tanzania, which accounts for 25% of Group turnover, despite challenging economic conditions, we maintained strong market share in our three-wheeler business. We have made good progress in growing our two-wheeler business and continue to invest in this. We see this as an excellent opportunity going forward. Our equipment businesses including Cummins have declined given a corresponding decline in market size. Margins remain low. Our focus is volume growth in the consumer segment.
In Uganda and Rwanda, which account for 5% of Group turnover, our business is mainly equipment related. Uganda and Rwanda have performed reasonably at EBIT level before forex adjustments and extraordinary items which resulted in a loss for the year.
The Poultry operations in Tanzania made a small profit.
On Investment Property business we will Clark on at least one property redevelopment in the next three months. We hope to comment another property development by the end of 2019 assuming we can secure an anchor tenant. We expect these developments will improve our Investment Property fields and values.
Our investment in Watu Credit is progressing satisfactorily having generated reasonable returns. Our Cummins Joint Venture has returned a profit and we expect improved results going forward.
The Company now has a comprehensive product line up with good balance, a solid infrastructure and an expanding distribution network. No further investments are required in infrastructure. Our diverse portfolio gives our business more optionality and ultimately more sustainability.
The current financial year looks positive in spite of current challenges relating to logistics largely port clearance processes (in both Kenya and Tanzania) and increased shipping lead times. Our focus will be on similar growth and operational efficiency. Critical will be the comment of our property redevelopment.

Car & General (Kenya) PLC H1 2018 results through 31st March 2018 vs. 31st March 2017

Total Assets 9.142266b vs. 9.065850b +0.843%
Total Equity 3.373231b vs. 3.206091b +5.213%
H1 Revenue 5.071865b vs. 5.187895b -2.237%
H1 Cost of sales [4.311823b] vs. [4.432614b] -2.725%
H1 Gross profit 760.042m vs. 755.281m +0.630%
H1 Other income 19.520m vs. 31.426m -37.886%
H1 Operating profit 255.932m vs. 227.272m +12.610%
H1 Finance costs [167.987m] vs. [206.160m] -18.516%
H1 Net foreign exchange gains/ [Losses] 11.587m vs. [54.211m] +121.374%
H1 Profit/ [Loss] before taxation 101.748m vs. [33.099m] +407.405%
H1 Profit/ [Loss] for the period 56.414m vs. [37.058m] +252.232%
Basic and diluted EPS 1.41 vs. [0.91] +254.945%
Cash and cash equivalents at the end of the period 205.546m vs. 96.739m +112.475%
No interim dividend

Company Commentary

Like for Like Sales +24%
EBITDA +56%
1b shillings of positive cash flow

Conclusions

A strong rebound which gained momentum in Q2 versus Q1

FY Revenue 9.635150b vs. 9.735788b -1.034%
FY Cost of Sales [8.184936b] vs. [8.152768b] +0.395%
FY Gross profit 1.450214b vs. 1.583020b -8.389%
FY Other income 257.508m vs. 32.506b +692.186%
FY Gain in fair value of investment properties 229.496m vs. 153.761m +49.255%
FY Selling and distribution costs [622.406m] vs. [614.235m] +1.330%
FY Administrative Expenses [739.836m] vs. [621.259m] +19.087%
FY Finance costs [407.625m] vs. [392.655m] +3.813%
FY Net FX [Losses]/ gains [61.878m] vs. 9.140m -777.002%
FY PBT 98.305m vs. 150.278m -34.585%
FY Profit for the year 79.841m vs. 88.872m -10.162%
FY Profit for the year attributable to owners of the parent 107.907m vs.
217.611m -50.413%
Basic and diluted EPS 1.71 vs. 2.22 -22.973%
Total Assets 9.400007b vs. 9.705198b -3.145%
Total Equity 3.357807b vs. 3.238539b +3.683%
Cash and cash equivalents at the end of year 258.353m vs. 88.919m
+190.549%
Final dividend 0.60 vs.

Company Commentary

Overall the Year has been extremely challenging.
Profit 10% lower decline was largely attributable to the following
1. Weaker performance of the Equipment business [Generators, construction
equipment, tractors and forklifts] contraction in these specific markets
due to constrained liquidity conditions, drought and uncertainty during the
election process.
2. Increased debtor provisions [specifically in the retail sector] and
inventory write downs. Majority are non recurrent.
In kenya highlight was growth in volume in our consumer business. This was
partially driven by the launch of new models of 2 wheelers and three
wheelers
We entered the finance business relating to these products
We signed a JV agreement with Cummins to form a partnership.
Tanzania Margins remain low. we maintain strong market share in our 3
wheeler business.
Uganda has performed reasonably.
Rwanda is small and as grown marginally.
Poultry operations in Tanzania continued to perform poorly.
Objective is to embark on two small property developments in 2018 and
liquidate some non core property.
Trading conditions this financial year look positive now that political
stability has returned.
Final Dividend 60cents a share

Conclusions

Poised to resume growth. I met Vijay over Christmas and he was singularly
optimistic about 2018

FY Revenue 9.635150b vs. 9.735788b -1.034%
FY Cost of Sales [8.184936b] vs. [8.152768b] +0.395%
FY Gross profit 1.450214b vs. 1.583020b -8.389%
FY Other income 257.508m vs. 32.506b +692.186%
FY Gain in fair value of investment properties 229.496m vs. 153.761m
+49.255%
FY Selling and distribution costs [622.406m] vs. [614.235m] +1.330%
FY Administrative Expenses [739.836m] vs. [621.259m] +19.087%
FY Finance costs [407.625m] vs. [392.655m] +3.813%
FY Net FX [Losses]/ gains [61.878m] vs. 9.140m -777.002%
FY PBT 98.305m vs. 150.278m -34.585%
FY Profit for the year 79.841m vs. 88.872m -10.162%
FY Profit for the year attributable to owners of the parent 107.907m vs.
217.611m -50.413%
Basic and diluted EPS 1.71 vs. 2.22 -22.973%
Total Assets 9.400007b vs. 9.705198b -3.145%
Total Equity 3.357807b vs. 3.238539b +3.683%
Cash and cash equivalents at the end of year 258.353m vs. 88.919m
+190.549%
Final dividend 0.60 vs.

Company Commentary

Overall the Year has been extremely challenging.
Profit 10% lower decline was largely attributable to the following
1. Weaker performance of the Equipment business [Generators, construction
equipment, tractors and forklifts] contraction in these specific markets
due to constrained liquidity conditions, drought and uncertainty during the
election process.
2. Increased debtor provisions [specifically in the retail sector] and
inventory write downs. Majority are non recurrent.
In kenya highlight was growth in volume in our consumer business. This was
partially driven by the launch of new models of 2 wheelers and three
wheelers
We entered the finance business relating to these products
We signed a JV agreement with Cummins to form a partnership.
Tanzania Margins remain low. we maintain strong market share in our 3
wheeler business.
Uganda has performed reasonably.
Rwanda is small and as grown marginally.
Poultry operations in Tanzania continued to perform poorly.
Objective is to embark on two small property developments in 2018 and
liquidate some non core property.
Trading conditions this financial year look positive now that political
stability has returned.
Final Dividend 60cents a share

Conclusions

Poised to resume growth. I met Vijay over Christmas and he was singularly
optimistic about 2018

Total Assets 9.065850b vs. 9.308668b -2.609%
Total Equity 3.206091b vs. 3.065784b +4.577%
H1 Revenue 5.187895b vs. 4.801107b +8.056%
H1 Cost of sales [4.432614b] vs. [4.056433b] +9.274%
H1 Gross profit 755.281m vs. 744.674m +1.424%
H1 Selling and distribution costs [325.532m] vs. [289.962m] +12.267%
H1 Operating expenses 227.272m vs. 246.322m -7.734%
H1 Interest expense [206.160m] vs. [189.903m] +8.561%
H1 Net foreign exchange [Losses] gains [54.211m] vs. 28.510m -290.147%
H1 [Loss] profit before taxation [33.099m] vs. 84.929m -138.973%
H1 [Loss] profit for the period [37.058m] vs. 41.831m -188.590%
Basic and diluted EPS [0.91] vs. 1.05 -186.667%
Cash and cash equivalents at the end of the period 96.739m vs. 69.924m +38.349%
No interim dividend

Company Commentary

We continue to invest heavily in 5 new businesses, mainly Doosan construction equipment, Kubota Tractors, Toyota forklifts, MRF and TVS motorcycles in Tanzania.
due to devaluations across the region, were was an adverse forex movement of 83m.
due to restriction on bank financing resulting from the interest rate cap, volumes in our equipment businesses [generators, construction equipment, tractors and forklifts] declined.
In Tanzania the economy is extremely challenging given current government reforms.
Exiting the Poultry business in due course.

Conclusions

FX.

FY Revenue 9.735788b vs. 9.929190b -1.948%
FY Cost of sales [8.152768b] vs. [8.304772b] -1.830%
FY Gross profit 1.583020b vs. 1.624418b -2.548%
FY Gain in fair value of investment properties 153.761m vs. 339.022m -54.646%
FY Selling & distribution costs [614.235m] vs. [631.512m] -2.736%
FY Administrative expenses [621.259m] vs. [619.130m] +0.344%
FY Finance costs [392.655m] vs. [369.172m] +6.361%
PBT 150.278m vs. 81.069m +85.370%
Taxation [61.406m] vs. 46.078m -233.265%
Profit for the year 88.872m vs. 127.147m -30.103%
Profit for the year attributable to owners of the parent 89.057m vs. 30.628m +190.770%
Profit for the year attributable to Non controlling interests [0.185m] vs. 96.519m -100.192%
EPS 2.22 vs. 0.76 +192.105%
Total equity 3.238539b vs. 3.021113b +7.197%
Cash & cash equivalents at the end of the year 88.919m vs. 68.443m +29.917%

H1 Revenue 4.801107b vs. 4.792813b +0.173%
H1 Cost of sales [4.056433b] vs. [4.018730b] +0.938%
H1 Gross profit 744.674m vs. 774.083m -3.799%
H1 Selling & distribution costs [289.962m] vs. [306.800m] -5.488%
H1 Net foreign exchange [loss]/ gains 28.510m vs. [77.159m] +136.950%
H1 PBT 84.929m vs. 32.952m +157.735%
H1 Profit for the period 41.831m vs. 16.691m +150.620%
EPS 1.05 vs. 0.43 +144.186%
Total equity 3.065784b vs. 2.805171b +9.290%
Cash and cash equivalents at the end of the period 69.924m vs. 190.887m -63.369%

Company Commentary

The Period has been very challenging
cites the December devaluation of the South Sudan Pound

Conclusions

Much better outcome notwithstanding a very realistic Company Commentary See here
http://www.rich.co.ke/media/docs/CAR%20&%20GENERAL%20(KENYA)%20LIMITED%20HALF%20YEAR%20RESULTS.pdf

FY Revenue 9.929190b vs. 8.298564b +19.649%
FY Cost of sales [8.304772b] vs. [6.820713b] +21.758%
FY Gross profit 1.624418b vs. 1.477851b +9.918%
FY Other income 27.914m vs. 58.686m -52.435%
FY Gain in fair value of investment properties 339.022m vs. 293.250m +15.609%
FY Selling and distribution costs [631.512m] vs. [574.817m] +9.863%
FY Administrative expenses [619.130m] vs. [561.916m] +10.182%
FY Interest expense [369.172m] vs. [277.590m] +32.992%
FY Net foreign exchange [Losses]/ Gains [290.471m] vs. 4.803m -6,147.699%
FY Profit before taxation 81.069m vs. 420.267m -80.710%
FY Taxation credit/ [Charge] 46.078m vs. [141.904m] -132.471%
FY Profit for the year 127.147m vs. 278.363m -54.323%
FY Revaluation surplus on property 126.838m vs. 93.101m +36.237%
FY Exchange differences arising on translation of foreign operations [23.307m] vs. [0.503m] +4,533.598%
FY Total comprehensive income for the year 212.777m vs. 354.956m -40.055%
FY EPS 0.76 vs. 6.57 -88.432%
Total assets 8.988047b vs. 8.152812b +10.245%
Cash and cash equivalents at the end of the year 68.443m vs. 57.243m +10.83%
No dividend

Company Commentary

In the accompanying commentary the Company said The year to September 2015 proved extremely challenging A Common theme running through various Profits Warnings has been FX and Car and General was no exception and I quote resulted in substantial foreign exchange losses [realised and unrealised] of Kenya Shillings 300m Car and General skipped a full Year Dividend

Conclusions

Serious margin compression.

First Half Earnings through 31st March 2015 versus through 31st March 2014
First Half Revenue 4.792813b versus 3.892525b +23.12%
H1 Cost of Sales [4.018730b] versus [3.217562b]
H1 Gross Profit 774.083m versus 674.963m
Gain in Fair Value of investment properties [306.800m] versus [270.705m]
H1 Administrative Expenses [227.454m] versus [195.586m]
H1 Intest Expenses [146.120m] versus [119.589m]
Net Foreign Exchange [Loss]/Gains [77.159m] versus 1.208m
H1 Profit Before Tax 32.952m versus 106.991m -69.20%
H1 Profit after Tax 16.691m versus 72.603m -77.01%
H1 EPS 0.43 versus 1.82 -76.37%
No Interim Dividend.

Company Commentary

The Period has been extremely challenging
Profitability has been negatively impacted by the recent devaluation of the Kenya Shilling against the Dollar from Kshs 90 to Kshs 96.00 which resulted in significant losses on dollar loan exposures
In Tanzania, the foreign exchange devaluation has been much more severe
Investment Property business continues to perform satisfactorily objective is to realise gainson at least one investment property this calendar year.

Conclusions

Tough times. Currency impact.

Full Year Earnings through 30th September 2014 versus through 30th September 2013
Full Year Revenue 8.298564b versus 7.056021b +17.6096%
FY Cost of Sales [6.818603b] versus [5.861852b] +16.321%
FY Gross Profit 1.479961b versus 1.194169b
FY Gain in Fair Value of Investment Properties 293.250m versus 292.500m
FY Selling and Distribution Costs [584.817m] versus [362.448m] +61.351%
FY Administrative Expenses [561.916m] versus [473.181m] +18.752%
FY Interest Expense [277.590m] versus [213.827m] +29.8199%
Full Year Profit before Taxation 420.627m versus 458.969m -8.353%
Full Year Profit after Tax 278.363m versus 315.790m -11.851%
FY Earnings Per Share 6.57 versus 7.35 -10.61%
Final Dividend 60cents a share

Company Commentary

The year to September 2014 proved positive, though extremely challenging
Gradual depreciation of Shilling from 86 to 90 versus the Dollar put pressure on margins
investments in additional branches and new business lines namely Doosan, Kubola, Toyota and MRF
slowdown in the 2 wheeler market due to introduction of VAT
We nowe need to achieve volume on an efficient base

Conclusions

Played a more expansive Game and therefore trimmed Profits. Headline Turnover was +17.6096%. Its well managed and is an interesting medium Term Play.

FY Earnings through Sep 2013 versus Sep 2012
FY Profit Before Tax 458.969m versus 354.518m
FY Profit After Tax 315.790m versus 266.556m +18.47%
FY Turnover 7.1b versus 5.711529b
Final Dividend of 80cents a share
Creating 7,000,000 additional Ordinary shares
Bonus Share of 1 share for Every 5 held

Conclusions

Car and General trades on a PE of 3.888 and that is cheap.

FY Earnings through Sep 2012 versus Sep 2011
Turnover 5.711529b versus 6.086106b -5.459%
Profit Before Tax 354.518m versus 427.926m -17.154%
Gain in Fair Value of Investment Property 196.750m versus 292.578m
Profit on Sale of Share in Subsidiary Company 119.755m
Interest Expense [261.716m] versus [186.652m] +38.729%
FY Profit After Tax 266.556m versus 288.706m -7.67%
Earnings Per Share 7.48 versus 7.79 -3.979%
Dividend 0.55 unchanged

Company Commentary

The Year to September 2012 proved extremely challenging. Rapid and Steep Devaluation of Shilling and then Revaluation had a significant negative impact.
Substantial Increase in Interest Rates.
Distribution Businesses faced extreme Challenges.
Growth of Cummins Businesses.
Entry into the MRF Tyre Business.
Establishment of Branch in South Sudan

Conclusions

On PE Ratio of 3.3422 I cannot see the Price going any lower.
The Full Results were strengthened via Profit on Sale of Share in Subsidiary Company 119.755m.
Its probably a Buy.

Swot Analysis 6 Months through March 2012 versus 6 Months through March 2011
Turnover 2.787764b versus 2.764696b
Interest Expense -142.923 versus -75.048m
Profit Before Tax PBT 163.473m versus 106.245m +53.8641%
Profit After Tax PAT 142.703m versus 72.739m
Exchange Difference Translation of Foreign Operations -46.08m versus +11.071m
Total Comprehensive Income 96.623m versus 83.81m
Earnings Per Share 4.27 versus 2.18 +95.871%

Conclusions

Well Managed and undervalued.


FY Results to Sep 2011 versus FY to Sep 2010
Turnover 6.086106b versus 4.779318b +27.34%
Profit Before Fair Value Gains 326.978m versus 412.561m
FV Gains Investment Property 292.578m versus 61.625m.
PAT 288.706m versus 238.234m +21.18%
EPS 7.78 versus 7.12 +9.269%
Final Dividend 0.55 versus 0.80 -31.25%

Company cites Adverse Foreign Exchange Movements as the biggest Challenge.

Conclusions

On a Trailing PE of 3.2133, Cargen looks compelling. They have grown their Regional Footprint and will surely perform in a Environment of reduced Currency Volatility.

Swot Analysis
Full Year Sep 2010 versus Full Year Sep 2009
Turnover 4.779318b versus 4.349489b
PBT 329.175m versus 279.39m
PAT 238.234m versus 197.984m
Revaluation Surplus on Property 58.87m versus 26.031m
EPS 10.7 versus 8.8
Dividend 0.80 versus 0.67

Share Capital of the Company is to be increased from 115,000,000 to 170,000,000
By Creation of 11,000,000 New Ordinary shares
Bonus Issue 1 for every 2 Held

Company Commentary

Profitability of Kenya Tanzania Businesses.
Growth of TVS Two Wheelers in Kenya
sustained market share in three wheeler Business
Citing Growth of Cummins brand Streamlining of Ethiopia Djibouti Seychelles
Better representation in Mining Sector in Tanzania

Conclusions

Strong Results and on a PE of 4.672 It looks attractive The Share
Price is +49.957% ex Dividends on a 1 Year Basis
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 21 Feb 2019
 
Downloads
 
  27-DEC-2018 ::  Full Year Results
  Financial Statements for the Year Ended 30th September 2018.

Download N.S.E Announcement
   
  25-MAY-2018 ::  Interim Results
  Interim Results for the Six Months Period Ended 31st March 2018.

Download N.S.E Announcement
   
  04-MAY-2018 ::  AGM Resolutions
  Annual General Meeting Resolutions.

Download N.S.E Announcement
   
 
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