The company plans to rely on innovation to come up with new products
Kampala, Uganda | JULIUS BUSINGE | Uganda Clays Limited, a clay building materials manufacturer located at Kajjansi, approximately 20kilometres from Kampala City Centre, along Entebbe Road, celebrated its 20 years of trading at the Nakawa based bourse on Jan.20 with lots of fun.
The fanfare event that took place at the Uganda Securities Exchange also provided an opportunity for the firm to reflect on its past achievements and hint on future opportunities.
The USE Chief Executive Officer, Paul Bwiso, said UCL’s bold step to list on the stock market in 2000 motivated other companies to go to the bourse to mobilise capital.
Showcasing the company’s performance on the bourse over the last 10 years, the stock market boss revealed that UCL has recorded turnover of Shs4.6bn out of the Shs1.4tn total turnover traded on the entire market during the period.
He said the shares traded for the same period stands at 176 million for the UCL counter compared to the general market trading of 10.3bn shares.
In terms of share price, for the last 10 years, the lowest share price has been Shs9 against the highest Shs29.
Equally, Jacqueline Kiwanuka, the chief finance officer at UCL said the company’s move to trade on the USE has enhanced its openness and transparency in the way it does its business in addition to giving the public a chance to own part of the company. UCL was the first company to list on the USE.
This development comes a few months to the release of its financial performance for the year ending Dec.31, 2019.
The company recorded an increase in total revenue from Shs27bn in 2017 to Shs30bn in 2018, according to its financial statement released last year.
However, its gross profit remained flat at Shs10.6bn as net profits sharply dropped from Shs2.3bn in 2017 to Shs1.9bn in 2018.
The drop in profit after tax revenue, according to the company’s top executives, was largely as a result of costs related to off season of coffee husks and increase in fuel prices in the period leading to the increase in cost of distribution.
There was also a 9% increase in the total overheads due to incentives of transport to agents and corporate customers.
Innovations for growth
In a bid to stir business growth, the company’s Managing Director, George Inholo, reiterated that they are working on various innovations and will put new tiles on the market soon.
He also said the company is looking for alternative sources of energy to deal with the unpredictable prices of coffee husks. He said they have enough clay reserves for production of various constriction materials.
For the Kajjansi factory alone, for instance, Inholo said the company has a reserve of up to 15 years and are still exploring other areas.
On the other hand, Kamonkoli plant in Mbale has a clay reserve that can last 70 years.
Inholo also said the company’s human resource function has greatly improved and that it requires all staff to hit their targets.
Beyond Uganda’s market, UCL executives insist that the plan to reopen their outlet in South Sudan is still on the table albeit the political instability that have engulfed Africa’s newest nation.
However, the company is still exporting the products to South Sudan on orders.
On debt, Inholo said the company does not have any commercial debt with banks except the National Social Security Fund (NSSF) where it is supposed to clear a Shs23bn debt. The negotiations in relation to retiring this old debt has been planned before end of this year.
Going forward, Inholo said his leadership strategy is to ensure that the cost of operation is minimized at every opportunity so as to boost profitability and ensure that shareholders earn dividends.
Historical facts (source; USE)
- Uganda Clays Ltd (UCL) was listed on the USE on the 18th of January 2000 becoming the first equity to be listed on the Exchange.
- UCL shares were 15% oversubscribed representing the market’s readiness for more trading. As of the 12th of September, 2002, UCL had a capitalization of Ushs.2.3 billion on the USE
- UCL was incorporated in 1950 as a private limited company by the Georgiadis Greek Cypriot family
- In 1956 all ordinary shares in the company were acquired by Westomat- a company based in Switzerland
- In the period following until 1996, Westomat transferred ownership to NHCC, White Tower Corporation and Charles Schaefer in a series of actions.
- In 1998 the Government of Uganda decided to sell to the general public its holding of 374,995 ordinary shares held by NHCC, together with 5 shares held by nominees of NHCC-UCL had been given Class 4 status meaning that government was to fully divest its interest in the company.
- In 1999 UCL was constituted into a public limited liability company and its Memorandum and Articles of Association were amended to reflect the change.
- This was followed by the Listing of the company on the-by then newly formed-USE within the provisions of the laid down by the Capital Markets Authority Statute, 1996.