Jubilee to Restructure Business
Staff Writer  |  Jan 25, 2020
       

During the week, Jubilee Holdings announced plans to lay off 52 employees as it completes splitting of its insurance business in Kenya to increase efficiency and management focus and to comply with the revised 2010 Insurance Act, cap 487, which requires all composite companies to have separate entities, by separating short-term underwriting business from the long-term underwriting business. The separation has led to the creation of two new companies,


Jubilee Health Insurance offering medical covers and Jubilee General Insurance offering general insurance covers. In H1’2019 Jubilee’s net profits dropped marginally by 1.6% to Kshs 1.8 billion, from Kshs 1.9 billion in H1’2018, attributable to a tough operating environment, which affected the top-line revenue, coupled with rising inefficiencies, consequently leading to declines in net income. Similarly in 2019, Sanlam Kenya PLC also undertook restructuring as part of a cost-cutting strategy aimed at trimming operating costs, a
the company aimed to record a profitable performance following the depletion of earnings in 2018 to record a Kshs 2.0 billion loss. Over the last few years, companies have continued to face economic challenges that has seen them restructure their staffing, with others declaring redundancies, and others opting for outright closure. The table below shows some of the listed companies that have announced or undertook restructuring in the last one year. In our view, restructuring continues to be a major theme shaping various sectors’ business models into 2020, with companies adopting cost-saving measures to boost bottom-line performance, attributable to a tough business environment;   Kenya Listed Companies Restructuring   Company Staff Retrenchment Date Jubilee Holdings 52 Jan-20 East Africa Portland Cement 800* Aug-19 Stanbic Bank of Kenya 88 Aug-19 East Africa Breweries Limited 100 Jul-19 Sanlam Kenya 19 Sept-19 Mumias Sugar** All staff Nov-19 *EAPC declared all its staff redundant and required them to reapply under new terms **Mumias sugar was placed in receivership on 20th September 2019    

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