Leading Kenyan Financial Services Firm Britam Shows Optimism in 2018 Despite Poor Performance in 2017

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Britam Holdings, a Kenya-based diversified financial services group, will focus on growth and diversification of revenue streams in the coming months following a somewhat disappointing performance in 2017.

The firm’s managers stated in an announcement that Britam will be keen on increasing its local and regional presence, while focusing on innovation.

The company recently issued profit warnings for their expected financial year (FY) 2017 earnings projecting that the earnings will be at least 25 percent lower than the company’s FY’2016 earnings.

The announcement takes the number of Kenyan companies that issued profit warnings for the year ended December 2017 to nine, compared to 11 companies in 2016.

Britam attributed the expected decline in earnings to a change in valuation method of long-term liabilities to Gross Premium Valuation (GPV) methodology from the previously applied Net Premium Valuation (NPV) methodology, which resulted in a one-off increase in FY’2016 earnings by Ksh5.2 billion ($50 million).

According to a report by Kenya based investment firm, Cytonn, Britam’s earnings per share for FY’2016 came in at Ksh1.1 ($0.01) from a loss per share of Ksh0.5 ($0.005) in FY’2015.

Britam Holdings registered a 44.1 percent decline in core earnings per share in the first half of 2017.

Meanwhile HF Group, a Kenya-based real estate company posted a decline of 80.9 percent in Q3’2017, which makes the announcement of profit warnings for FY’2017 earnings not surprising, according to Cytonn.

Britam is the top shareholder at HF Group with a 19.5 percent shareholding. Both companies are however optimistic that they will experience a turn-around in 2018 driven by key strategic initiatives.

HF Group is leveraging on adoption of digital channels and scaling up on provision of affordable and decent housing to drive growth in 2018, while Britam Holdings remains keen on executing a 2016 to 2020 strategy, which focuses on growth and diversification of revenue streams.


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