Longhorn Publishers, a renowned name in the education sector, has reported a net loss of KSh 193.3 million for the first half of the fiscal year, despite recording a revenue increase of 3.7% year-on-year, reaching KSh 525.9 million.
The company’s gross profit saw a significant decline of 12.3% to KSh 81.7 million, resulting in a gross margin of 15.5%, down from 31.3% in the previous year. Longhorn attributed this decline to a 70% surge in printing costs due to currency depreciation, coupled with increased operational expenses.
Maxwell Wahome, Group Managing Director and CEO, and Francis T. Nyammo, Group Chairman, acknowledged the challenging macroeconomic environment, citing rising inflation, interest rates, and an economic slowdown across markets, which led to reduced spending on textbooks.
Longhorn anticipates a stronger second half of the year, driven by expected government contracts worth KSh 550 million and opportunities to expand its market share. The company is also focusing on digital initiatives, with upcoming partnerships with telecommunications companies aimed at scaling digital revenues.
The firm highlighted a 10% decline in revenue, amounting to KSh 61 million, primarily attributed to an 80% drop in government revenue due to delayed textbook distribution. Operating expenses decreased by 25%, reflecting a leaner cost structure, while finance costs surged by 44% due to interest rate hikes.
Longhorn Publishers, established in 1965, specializes in educational and general books for various educational levels. Despite the financial challenges, the company remains committed to achieving its digital business goals and expects significant updates to the Competency-Based Curriculum (CBC) in 2024.
On the Nairobi Securities Exchange (NSE), Longhorn’s share price closed at KSh 2.25 per share on February 27, 2024, marking a 2.3% gain from the previous closing price. However, the company has experienced a 6.64% decline in share price since the beginning of the year, ranking it 50th in terms of year-to-date performance on the NSE.
