Vision Group profits plunge after it raises provision on debt

New Vision Printing and Publishing Company Ltd said its after-tax profit for the year ended 30 June 2017 had fallen sharply after a decline in revenue and a “huge” provision for doubtful debts.

The media company reported a 99.7% decline in net profit to Shs14 million, from Shs4.9 billion in the previous year. The biggest hit to its bottom line was an increase in other operating expenses to Shs6.2bn from Shs2.9bn in 2015/16, arising from a Shs3.1bn provision for doubtful debts.

Revenue fell 7.1% to Shs86bn, with all segments save for events and radio and television registering declines. Commercial printing revenue was down by 22% compared to the previous year, while newspaper copy sales and print advertising fell 8.6% and 8% respectively.

However, according to a press release by the company, revenue from events grew by 46% while the radio and television segment performed at a level similar to the previous year.

Gross profit reduced to Shs21.5bn compared to Shs24bn the previous year due to the fall in revenue and a 6% drop in the cost of sales to Shs64.5bn. Vision Group attributed the decrease in cost of sales to a reduction in revenue driven costs, particularly imported raw material inputs, sales commission, and electronic media content.

On plans for the next year, the company said it is aiming to increase revenue from commercial printing significantly due to “the high market potential in and outside Uganda including label printing”. To this end, Vision Group invested “heavily” in commercial printing machinery.

It spent Shs11bn on the purchase of property, plant, and equipment in the financial year, compared to just Shs1.8bn in the previous year. Vision Group recently moved into newly acquired office space in Industrial Area, Kampala. The building on First Street previously housed a nightclub, Club Silk.

“We have no debts. We used our own money to buy and renovate this building. And for the first time in New Vision’s 30 years history, the company is not renting premises, this has enabled us to save $216,000 in rent annually,” Vision Group’s chief executive Robert Kabushenga said at the building’s official launch.

Total assets increased to Shs85.8bn from Shs70.7bn, driven by a 98.9% rise in the value of property, plant and equipment to Shs49.3bn.

The company will not pay a dividend for the year due to its performance.

Vision Group will hold its annual general meeting on 23 November 2017 at the New Vision head offices on First Street, Industrial Area, Kampala.