[2008-07-04]  Olympia Capital Holdings Doubles Its Turnover
Olympia Capital Holdings, the listed holding company with stakes in building materials supplier and property companies has more than doubled its turnover in the 14 months trading period ending February 29, 2008.
The company which has been on an acquisition spree in the recent past has signalled its intention to relax and focus on building the existing businesses.
"Our focus is now on the revenue growth and profitability of the businesses in our stable," said the holding company's chief executive, Mr Michael Matu.
The new tile manufacturing plant owned by its subsidiary, Dunlop Industries Limited is expected to help the company improve its cash flow when it starts operating in October, 2008.
Analysts say revenue growth should be the ideal focus for the company especially because it borrowed heavily before the rights issue last September to finance the acquisitions.
The heavy borrowing resulted in a rise in cost on loans from Sh4 million to Sh36 million in the trading period ending February 29, 2008. Mr Matu is, however, optimistic that this will come down this year because there will be no new acquisitions.
Mr Michael Ojudi of the Sterling Securities research department said it was surprising that the company would pay a dividend of Sh0.20 per share on August 11, 2008. He said the company's priority should be loan repayments. "For now, it is like the company is borrowing to pay dividends. It is not the right time. It should focus on building revenue growth. "
The company's balance sheet shows that dividends payment will put it back by Sh8 million shillings, money that analysts say could be used for other purposes.
The company's turnover increased from Sh397 million to Sh1.4 billion while profit from operations also more than doubled from Sh30 million to Sh74 million. The company has made three major acquisitions using the Sh420 million it raised for the September 2007 rights issue.
The latest acquisition is the purchase of 49 per cent of Mather & Platt Kenya Limited, which deals in fire systems, water services and mechanical installations.
Earlier, the company purchased 50 per cent share in a Cape Town based business called Natwood, which supplies wooden furnishing materials.
The company also increased it's shareholding in Avon, a local property company from 27.5 per cent to 47.5 per cent.
Its subsidiary, Olympia Capital Corporation (OCC), which is listed on the Botswana Stock Exchange, had a successful 1:1 rights issue in March 2007 to pay off debt used in the acquisition of 74 per cent of Plush products (pty) Limited, a mirrors and shower doors distributor in South Africa.
The company has announced that it will hold its annual general meeting August 4, 2008.

Source: Allfrica