Yesterday, the Standard Group posted a 91 per cent drop in its 2015 half year pre-tax profit to Sh. 21 million. This was a massive drop considering that in the same period last year, Standard Group posted a half year profit of Sh. 205 million. The group’s management has since come out to direct blame on the digital migration and the staged switch off conducted by three media houses Nation Media Group, The Standard Group and Royal Media Group.
According to the Standard Group’s finances, revenue dropped 7 per cent to Sh. 2.2 billion from Sh. 2.37 billion. In the print category, advertising business went down by 4 per cent while in the television category, it declined by 27 per cent.
The results were released a few weeks after Standard Group launched a 24-hour news station KTN2. The station, which has been relying on the workforce of the old KTN, is yet to start making stable in-roads in the country’s viewership.
Earlier in March this year, the group posted an 8.4 percent rise in pretax profit for 2014 due to growth in print, TV and radio advertising. Profit before tax climbed to 326 million shillings ($3.6 million), while revenue nudged marginally lower. The company said it would pay a final dividend of 0.50 shillings per share, unchanged from the dividend paid in 2013.
Following the poor results recorded yesterday, though, the board of directors did not recommend an interim dividend. The sharp decline in profits comes at a time when Standard Group has been massively axing its workforce in a bid to cut costs. In an exercise that has been aimed at cutting down on its current workforce by 30 per cent, journalists at the group have become an endangered species, with many big name being shown the door over the past few weeks.
Consequently, it has been reported that Standard Group has been forced to take up a Sh. 500 million bank loan to pay the departing employees. Many of the journalists who have left the group include those from its superior rival Nation Media Group. Some of the big names included:
- Julius Maina –ME, Special projects
- Peter Okong’o (deputy ME, daily)
- Dorcas Muga (deputy ME, weekend)
- Juma Kwayera –writer, Saturday
- Oscar Obonyo – writer, Sunday
- Stephen Makabila -writer, Sunday
- Kwamboka Oyaro –features editor
- Joshua Kemboi- KTN sports editor
- George Mulala – Standard photo editor
- Peter Choge -sub-editor, Saturday Standard
- Terry Mwenda –subeditor, The Standard
- Grace Tunya
- Sarah kinya -TV producer
- Mwanaisha Chidzuga – TV host.
The Standard Group’s market share has been slimming over the recent past, with reports that its newspaper circulation has fallen to sharply, leaving the oldest newspaper in Kenya struggling behind the Daily Nation, X News and The People Daily (PD). According to figures, X News free paper which is released in the evening records a distribution of about 150,000 copies per day, while The People Daily (PD) distributes between 70,000 on weekends and 100,000 on weekdays. Standard Group’s The Standard newspaper on the other hand has been distributing an average of 70,000 copies per day.
Additionally, it has been reported that the Moi family which is associated with the Standard Group’s ownership is currently seeking to bring in a new management, with the current CEO Sam Shollei expected to be shown the door. Former editorial director at the Nation Media Group Mr. Joseph Odindo has been tipped to take over his former position in a bid to resuscitate the paper’s falling fortunes on a four year contract. Mr. Shollei succeeded Mr. Paul Melly in 2012.