Britam profit up 12pc, driven by good returns

Britam Managing Director Benson Wairegi. (Photo: Standard)

By NICHOLAS WAITATHU

Kenya: British American Investment Company’s (Britam) pretax full-year profit rose 12 per cent, helped by a rise in investment income.

The firm’s 2013 pre-tax profit rose to Sh3.2 billion, after investment income rose 26 per cent to Sh6.3 billion.

Group Managing Director Benson Wairegi said yesterday that dividends would have been higher were it not for the company committing huge capital to acquire a real insurance business.

This is in addition to setting up new subsidiaries locally and in the region. He was speaking in Nairobi during the release of last year’s results.

“It is true we could have raked in more cash by the end of the 2013 financial year if we did not embark on a regional business strategy. However, by accruing more cash without investment, commitment would equally have impacted negatively on our business growth,” said Wairegi.

He said the company committed more than Sh1 billion to establish subsidiaries in Rwanda, Southern Sudan and Uganda. It also opened 10 new branches in Kenya. The firm boasts insurance, asset management and property development businesses.

Britam’s revenue rose 29 per cent to Sh15.13 billion while earnings per share remained unchanged at Sh1.40. The company said it would pay a final dividend of Sh0.25 per share, same as the previous year. The company’s Finance and Strategy Director Gladys Karuri explained that the asset management business achieved a profit before tax of Sh243.6 million compared to Sh115.9 million in 2012, representing a 110 per cent growth.

“The insurance business registered a pre-tax profit of Sh2.5 billion from Sh1.5 billion in 2012, accounting for a 68 per cent growth. Micro insurance grew to Sh187 million up from Sh132 million in the previous year while general insurance grew to Sh1.4 billion in 2013, up from Sh1.1 billion,” she added.

Increase in revenues riding on assets under management grew to Sh36.3 billion from Sh28.1 billion in 2012, a 31 per cent increase. Further, the organisation expended Sh1.4 billion to acquire a new real insurance business in Malawi, Mozambique and Tanzania.

On the local scene, the company opened three full-fledged branches to the tune of Sh60 million and 12 satellite outlets at a cost of Sh60 million.