Investor Information

It is my pleasure to present to you my maiden Group’s annual report and financial statement for the year ended 31 December, 2007. The business environment was stable with most sectors of the economy including financial services, tourism, agriculture and telecommunications once again performing well. This resulted in an overall average GDP growth of 7 %.
Despite General Elections being held in Kenya in 2007, I am gratified to report that we acquitted ourselves very well and discharged our mandate of reporting events in the region in a balanced, accurate and objective manner. Our staff did a tremendous job in meeting the challenges and surpassing their targets, for which I highly commend them.
The period under review was exceptionally good for the Group because of the strong recovery of the economy and the appreciation of the Kenya shilling against major world currencies. These factors led to improved revenues and lower costs especially of direct materials sourced in foreign currency.

2007 RESULTS
Turnover in 2007 grew by 21% to Kshs.7.7 billion while profit before tax grew by 39% to Kshs.1. 6 billion over the previous year.
All the Group’s divisions and subsidiary companies recorded improved results over the previous year. However, the results were partially offset by start up costs of new products launched during the year, namely the Business Daily and the Daily Metro. Both these papers have established a strong presence and curved a niche in the market.
Group profit attributable to shareholders grew by 39.1% to Kshs.1, 089.6 million.

Dividends
An interim dividend of Kshs.3.00 (60%) per share was paid in September 2007, but considering the exceptional performance of the Group, your board of directors recommends the payment of a final dividend of Kshs.7.50 (150%) per share. The total dividend per share for the year 2007 at Kshs.10.50 (210%) represents an increase of 50% over the amount paid for the previous year excluding the special dividend of Shs.5.00 per share paid in 2006.

Future Business and Strategy
The Group continues to study market trends and identify gaps where they exist. In line with this strategy, a gap has been identified in the Digital business. Your board has, therefore, sanctioned that an independent division dealing with the Digital media business should be established. The division will be responsible for the formulation and implementation of the Group’s digital plan. The board hopes that this will give the business the required focus and become a key source of revenue in future.

Confidence in a Bright Future
There was a slow start in Kenya due to the post-election crisis but business prospects have improved greatly after the signing of a peace accord in late February 2008.In Uganda and Tanzania, the good economic start to the year has continued and business prospects look very promising. The Monitor Publications Ltd is going from strength to strength and NTV (U) has fully recovered from its closure early last year, after we constructively engaged the government on matters of the freedom of the press.
In Tanzania, Mwananchi Communications Ltd is finally turning around and its prospects look highly promising.

The Board and Management
During the year, Mr. H. H. Awori,Aluanga and Mr. D d’Acremont for the dedication in which they have served the Group.
Ms. V. Unwin and Mr. S. Gitagama joined the board as non-executive and executive directors respectively. Please join me in welcoming them to the board.
Finally, I would like to express my sincere gratitude to all board members for their continued dedication to the Group. In particular, my sincere thanks go to Mr. L. W. Gitahi who has just concluded his first full year in office for settling in fast and steering the Group through a very successful year.

Dr M J Aliker
Chairman