Flame Tree records a 17 pc jump in net profit

By Green Last updated Apr 28, 2016

Flame Tree Group has reported strong performance for its first full financial year since listing on the Nairobi Securities Exchange (NSE).

The groups annual net sales for the 2015 financial year increased 29 per cent to Sh2.28 billion, compared to net sales of Sh1.76 billion in the 2014 financial year.

The company reported a 37 per cent increase in Earnings Per Share (EPS) to KES 1.36.

The Group outperformed other manufacturing companies, as well as GEMS listed companies – with its manufacturing vertical contributing 75 per cent of the total revenue. Flame Tree Group operates in two verticals, manufacturing (of plastics; cosmetics; and food) and trading.

Commenting on the results, Flame Tree Group CEO, Heril Bangera said,

“In the face of increasing competition and a tough economic environment, we have made considerable progress on our strategic plans, to generate an 86 per cent increase in our normalized operating profits. The acquisitions made in foods, snacks and cosmetics capped off FY 2015 really well for us.”

Flame Tree Group’s FY 2015 acquisitions were in the cosmetics and snacks sub-sectors. The first acquisition since listing was Chirag Kenya’s food and snacks brands – Natures Own, Chigs, Honeycomb and Gonuts.

Heril Bangera says that the addition of the new brands in the 2015 financial year doubled the size of the food portfolio, enabling cross-promotional opportunities for complementary brands and products.

“We’re really pleased with how the integration of the new brands has gone and we’re excited about the domestic food production category across the region.” He adds

Operating profit before gain on disposal of property, plant and equipment increased to Sh259 million, compared to Sh139 million in the 2014 financial year. Profit before tax was up by 37 per cent to Sh198 million from Sh144 million in the 2014 financial year.

“In 2016, our focus will be on investing in our brands and building the foundation for accelerated growth in 2017. We see more potential for innovation in our portfolio – particularly with our new Creative Director, Suzie Wokabi on board. Our customer’s needs and purchasing behaviors are changing and we’re focused on providing great African brands at a variety of affordable price points.” He says

Flame Tree Group operates across two business verticals, manufacturing and trading, in six countries. Its strategy is to build a diversified portfolio of African-manufactured brands for African consumers, covering plastics, cosmetics and food in multiple markets and verticals.