Longhorn Publishers reports impressive FY earnings

Longhorn Publishers, a major player in the education sector, has reported a remarkable 29% increase in net profit for the year ending June 30, 2017, reaching Ksh133 million. The growth can be attributed to the company's strategic focus on cost management and production efficiencies. In a recent interview on CNBC Africa, Maxwell Wahome, the Chief Financial Officer of Longhorn Publishers, discussed the key drivers behind the impressive financial performance. Wahome emphasized that a critical aspect of their success was the meticulous management of costs, particularly in printing expenses. By optimizing inventory planning and printing schedules, the company was able to achieve significant cost savings, leading to improved gross margins from 50% to 52%. These cost-saving measures had a substantial impact on the company's bottom line, yielding substantial savings on a total turnover of approximately 1.4 billion. Moreover, Longhorn Publishers undertook a comprehensive review of administrative expenses, identifying areas for cost reduction without resorting to job losses. Wahome clarified that the restructuring was aimed at reallocating resources to different segments of their business, such as primary, secondary, and tertiary education, to enhance revenue generation. The company's efforts resulted in a more efficient allocation of staff, ensuring that the right personnel were deployed in the appropriate departments. A notable aspect of Longhorn Publishers' success story has been its foray into digital publishing and e-learning platforms. With a focus on digitizing over 300 products, the company has emerged as a leader in the digital space within Kenya. The exponential growth in digital sales, accounting for 70% of gross margins, underscores the importance of technological innovation in the publishing industry. Wahome expressed confidence in the future trajectory of the digital business, anticipating further growth beyond current levels. Longhorn Publishers' ambitious geographic diversification strategy, spanning seven countries including Malawi and Zambia, has provided additional growth opportunities. Operating on a distributor model, the company has leveraged strategic partnerships to penetrate new markets and secure government tenders efficiently. By tailoring content to suit local market preferences, Longhorn Publishers has achieved success in expanding its footprint across East Africa. Looking ahead, Wahome reassured shareholders of the company's commitment to sustained growth and innovation. Despite announcing a dividend of 0.29 shillings per share, Wahome encouraged stakeholders to focus on the company's long-term growth plan rather than immediate returns. He outlined Longhorn Publishers' vision to become a leading provider of innovative learning solutions across Africa, signaling a promising future for the company. Furthermore, the CFO highlighted the significance of reference materials, such as Kamusi dictionaries, in driving future growth. Launching products like Kamusi Ku for East African markets has been instrumental in capturing a broader audience and expanding the company's reach to over 115 million Swahili speakers in Africa. In addressing challenges related to government policies, Wahome acknowledged the impact of VAT on books and education costs. Longhorn Publishers is actively engaging with authorities to advocate for policy reforms that would alleviate financial burdens on students and promote access to affordable education. By navigating regulatory hurdles and pursuing strategic growth initiatives, Longhorn Publishers is poised to continue its upward trajectory in the education sector, both in Kenya and beyond.