KENYA – The Kenya based flour milling company, Unga has reported a gainful year with revenues rising 2.3% to US$198.25 million after discontinuation of Uganda operations which contributed to losses in the previous year.
According to Business Daily, profit for the financial year ended June stood at US$7.76 million comparable to a US$69,791.39 loss made in the same period in 2017.
Operating profit was helped by lower cost of sales while the previous year where operating profit was merely US$2.35 million, weighed down by high cost of sales.
A statement issued by the company showed the period was affected by the government’s subsidy program introduced in the first half of the year, where it was able to sell its popular brands Jogoo and Hodari at the same price.
The company which also engages in manufacturing of human nutrition products and animal feeds under its subsidiaries Ennsvalley Bakery Limited, Unga Farm Care (EA) Limited, Uganda Millers Limited said it was not allowed to sell its premium maize meal brand Hostess during the first half of the year.
“The group continues to roll out the new strategy for Ennsvalley bakery business to recover its revenue base following closure of all in-store operations with Nakumatt of which one element is opening new in-store counters in partnership with leading supermarket chains,” the firm said.
Meanwhile, Unga Group’s minority investors have bought additional shares of the miller worth US$297,324.09 enhancing their opinion in the company matters.
Blocking Seaboard’s buyout bid
This comes after the activist investors rejected a US$0.40 per share buyout from US based conglomerate, Seaboard Corporation.
According to August regulatory filings seen by the Business Daily, Rakesh Gadani and institutional investors BID Portfolio Management and Sayani Investments are among the shareholders who bought more Unga shares.
This gives them a combined 10.29% stake, enough to block Seaboard Corporation from de-listing it from Nairobi Stock Exchange, in a planned shareholder meeting.
Plan to take the miller private was announced in July when a section of Unga shareholders agreed to sell 12.2 million shares to Seaboard, raising the latter’s stake from 2.92% to 18.97%.
Despite the backing from major shareholders, the firm could not garner the minimum 75% threshold that was required for a takeover.
Seaboard which is valued at US$6.67 billion in net sales annually, is engaged in engaged in commodity merchandising, grain processing and sugar production in Africa.
It had announced it planned the completion of the Unga deal by the end of September.