ScanGroup Limited Reports 2% Increase in Gross Profit and Loss Due to One-Off Severance Charge in H1 2023

Published On: August 30, 2023Company: ScanGroup Limited (SCAN.ke)
What was the major contributing factor to the loss during the six-month period ended 30 June 2023?
The major contributing factor to the loss during this period was the inclusion of a one-off severance cost of Kshs 178 million, resulting from the company's comprehensive restructuring programme.

Summary

  • ScanGroup Limited announced the unaudited results of the Group for the six-month period ended 30 June 2023, with a 2% increase in gross profit compared to the same period in previous year.
  • The company undertook a comprehensive restructuring programme in Q2 2023 to better align with current and future client needs. This included a one-off severance cost of Kshs 178 million, which resulted in a reduction in profit from Kshs 9.6 million to a loss of Kshs 106 million.
  • Major trading currencies, including the Kenyan shilling, Ghana Cedis, and Nigeria Naira, have depreciated, leading to a higher exchange gain of Kshs 182 million compared to a gain of Kshs 65 million in the previous period.
  • The loss for the period was mainly driven by the one-off severance charge, resulting in a loss of Kshs 124.5 million compared to a loss of Kshs 47 million in the previous period.
  • The accounting policies used are consistent with those used for the Group’s 2022 annual financial statements.
  • No interim dividend is recommended by the Board of Directors.
  • Despite the inflation and increased cost of living, the company is optimistic about growth in the second half of 2023, predominantly driven by technology-backed solutions and increased new business activity.

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About ScanGroup Limited (SCAN.ke)

WPP-ScanGroup Limited is the largest marketing and communication group in the Africa sub-region with leading advertising agencies and media houses falling under the holding company name. These include Ogilvy & Mather, SCANAD, JWT, BluePrint Marketing, GroupM, MediaCom Africa, Mindshare and MEC. Public relations companies include Ogilvy PR and H+K Strategies; marketing research agencies include Millward Brown; specialty communication agencies include Roundtrip and Geometry Global; digital companies include OgilvyOne, Squad Digital and SCANAD Digital. WPP-Scangroup has expertise in advertising, media investment management, advertising and marketing research, public relations, digital advertising and communications marketing strategy. WPP-ScanGroup has a presence in 25 countries in sub-Sahara Africa and majority-owned offices in Kenya, Ghana, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zambia. It has minority-owned operations in Burkina Faso, Cameroon, Gabon, Ivory Coast, Namibia, Senegal and Zimbabwe. Scangroup became a subsidiary of WPP in 2013 and the company changed its name to WPP-Scangroup Limited in 2015. WPP-ScanGroup Limited is listed on the Nairobi Securities Exchange

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