Longhorn shares rise on government schoolbooks contract win
Longhorn lands government contract to print textbooks for grade school learners. The overhaul of the education system promises big business for book printers like Longhorn. Longhorn’s profits have been rising but Covid-19 situation threatens to show it down.
|Longhorn Publishers CEO Maxwell Wahome|
Longhorn Publishers PLC (LKL) shares rose 0.20% on July 1 to close at Ksh4.91. The shares jumped after Longhorn landed a role in the printing of schoolbooks under a government contract.
Kenya is in the process of overhauling its education system. Currently, the government is underway with the rollout of a new curriculum for basic education in grade schools.
The rollout of the so-called competency curriculum entered grade 4 last year. But its rollout to grade 4 this year has been disrupted by Covid-19 outbreak that has forced the government to shut schools across the country. However, education officials have recently been talking about reopening schools in September for the final term of the year if Covid-19 would have been brought under control by then.
The overhaul of Kenya’s education system promises to boost business for book printers. Longhorn has been picked to print Christian Religious Education textbook for grade 5 learners.
Although Longhorn shares jumped on the government schoolbooks contract win, they have been under pressure this year. Longhorn shares are down 27% this year and trade 43% below where they were at a time like this last year, present a discount opportunity for bargain hunters.
The stock market is generally under pressure as the Covid-19 fallout has hit investor appetite for company shares. The NSE All-Share Index, which tracks the performance of all stocks in the country, is down 17% this year. The NSE 20-Share Index, which tracks blue chip stocks like Safaricom PLC (SCOM), Equity Group Holdings Ltd (EQTY) and Nation Media Group PLC (NMG).
Longhorn’s financial year ends in June. Notably, the company has been growing its profits consistently for several years. For the financial year ending June 2019, it posted over Ksh185 million profit, which rose from Ksh183.6 million in fiscal year ended June 2018. However, Longhorn expects its profit for financial year ended June 2020 to drop as it grapples with Covid-19 fallout.