Sameer moves to real estate after shutting tyre distribution unit

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Sameer Africa has shifted its focus to its real estate days after closure of its tyre distribution unit.

The company now believes it will make gains in the real estate after shutting the tyre business that saw it make losses for years despite efforts to cut costs.

“The impact of this change is that the company will henceforth trade mainly in the rental business arena,” read a statement from Sameer.

Sameer said closing of the tyre business would cost the company loss worth Sh1.49 billion. However, the profit from it will rise due to the reduction of losses from the tyre division.

“The full-year profit projection in 2021 is forecast at Sh185 million, against a forecast of Sh69 million this financial year 2020,” said Sameer.

According to Sameer, Sh223 million will be used to shut the tyre business. This includes Sh 60 million cutback costs and Sh163 million in dealing with fixed assets.

Although the tyre business has come to an end, investors believe land still holds value. The company has land holdings it acquired decades ago at a lower price and has been reporting the value of those lands at its balance sheet.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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