Thursday, December 14, 2006

Olympia Expands Its Home Improvement Portfolio


The Players:

  • Olympia Capital Holdings Limited (OCHL) - quoted on the Nairobi Stock Exchange
  • Olympia Capital Corporation (OCC) - quoted on the Botswana Stock Exchange
  • Plush Pty (PP) - S.African manufacturer, importer & fitter of Blinds & Window Accessories
  • Kalahari Floor Tiles (KFT) - Manufacturer of PVC floor tiles based in Gaborone, Botswana. It also has an Industrial & Commerical Cleaning Chemicals division.

OCHL is a 53% shareholder OCC, which is a 100% shareholder of KFT.

OCC acquired 74% of Plush Pty - a S.African manufacturer, importer & fitter of Blinds & Window Accessories. Plush is among S.Africa's largest firms in this this sub-sector of Window Treatments.

The acquisition will be consolidated into OCC for accounting purposes. OCC is consolidated into OCHL's Financial Statements thus vaulting OCHL into a KES 1 Billion (sales) company.

OCC has continually stated it expects to grow via acquisitions while the core PVC tile business (KFT) is used a cash cow. KFT has one of only two PVC Tile plants in the Southern Africa region.

KFT expects sales (& profits) to grow as S.Africa accelerates construction in readiness for the 2010 World Cup. This is the first World Cup to be held in Africa & S.Africa wants to make sure it showcases the event.

To correct the injustices of the apartheid years, S.Africa is expanding its housing stock - primarily in the middle & lower-income housing market - to accomodate the growing urban population.

OCC acquired 74% of PP using Bridge Financing through a combination of bank debt, internal cash (via KFT) & funds from Kenyan Investors.

OCC plans a Rights Issue in Feb 2007 to repay the Bridge Financing. OCHL's management plans to maintain the 53% ownership in OCC by raising funds through Rights Issue in 1Q 2007.

KFT expects to continue acquiring other Botswana-based businesses in the Chemical/Cleaning Manufacturing sector.

OCHL expects to install a new PVC Tile plant at the Nairobi factory in 2007 to increase its current capacity.

The price of OCHL has been fluctuating but has broken out of the KES 15-17 band. It reached a high of 40/- since the PP acquisition was announced. Price on 13 Dec 2006 = 32/-.

OCC trades on the Venture Capital Board on the BSE but is expected to move to the Main Board after the Rights Issue.

OCHL trades on the Main Board (Industrial & Allied) of the NSE.

1 comment:


Nice take on olympia