NSSF Seeks Top Position On New Vision Board

information pills geneva; font-size: small; line-height: 200%;”>In a letter dated February 10, cheapest which more about geneva; font-size: small; line-height: 200%;”>Chimpreports has seen, the Fund’s Corporation Acting Corporation Secretary, Martin Obia informs his New Vision counterpart:

“The Board of Directors of the NSSF has nominated Mr Pius Bigirimana to replace Christine Gwatudde Kintu as its representative on the Board of the New Vision and Publishing Company Limited.”

Kintu is the Permanent Secretary in the Office of Prime Minister. She replaced Bigirimana who is now serving as Permanent Secretary in the Ministry of Gender.

Bigirimana’s position at the ministry guarantees him a position on the NSSF board.

Obia further urged New Vision to “formalize Bigirimana’s appointment in accordance with the Company’s Articles of Association.”

Insiders told this investigative website that NSSF intends to keep a close eye on the financial operations of the New Vision Group business empire as its profits continue to take a nosedive.

NSSF recently wrote to New Vision Group’s Managing Director Robert Kabushenga seeking information on the changes he intends to make on “increasing revenue, improving operating efficiency, considering debt financing and rethinking your electronic media strategy.”

The Fund’s Board Chairman Ivan Kyayonka warned: “We would like to observe this and at the end of a six months period we will review the changes and take a decision on our shareholding.”

He emphasized that “At the current price of shs630 per share, the current value of the Fund’s share is shs9.4bn. Taking into account the cost of shares at shs22.49bn in 2008 and dividends so far received amounting to shs2.28bn; the Fund’s investment in the NVYPPC has depreciated by 48%.”

This implies that New Vision’s failure to increase its profitability since 2008; workers have so far lost over shs10bn in depreciated shares.

Kabushenga is yet to respond to an email regarding this matter.

Contacted, Bigirimana said he was not in position to comment on the latest developments.


Kyayonka last week observed that the board of directors of NSSF has considered its equity investment in the NVYPPC and observed that between 2006 and 2013, “all profitability indexes exhibited a declining trend.”

Kyayonka further said given the current price of shs630, the stock is trading at a trailing price/earnings (P/E) ratio of 13.7 and a dividend yield of 5.56 percent, adding, “Unfortunately, the fund purchased the shares in 2008 and exercised the rights issue at the price of shs1, 100. The price share has consistently fallen since then.”

He also hinted on the Fund’s analysis of performance results for the half-year periods of 2013 and 2014 which revealed that EPS (Earnings per Share) had declined by 43 percent from shs30 in 2013 to shs17.3 in 2014.

Operating profit also declined by 41 percent from shs3.2bn in 2013 to 1.9bn in 2014.

Observers say NSSF is using its clout to pile pressure on Vision Group to avoid poorly planned expansion activities that could lead to the media group’s collapse.

“We are taking this action so that NSSF customers do not lose their money being held in shares in New Vision Group in case the worst happens. However, we are optimistic that there is room to make the necessary changes to boost revenues, restore investors’ confidence and salvage the situation,” said a source who preferred anonymity given the sensitivity of the matter told Chimpreports last week.

Public debate

In an article published by the Observer on Tuesday, Business editor Jeff Mbanga expressed regret for purchasing shares in New Vision.

“… as I look back now, with Vision’s share price floundering around the Shs 600 mark, its profit dropping annually, and its struggles with high operation costs, I cannot help it but feel a deep sense of despair.

How did the Vision share price, which attracted so much demand in the first three and a half years after its listing, get to this point, where hardly anyone wants to take a look at it?” he wondered.

“So, for now, Vision’s shareholders on the stock market continue to retain the stock, preferring to look long term, but also for fear of selling at a loss. Vision group has to come up with a better strategy to appease the interest of its shareholders.”


Agaba Rugaba, a socio-economic commentator, sides with Kabushenga’s ambitious expansionist agenda.

He says in modern day business, diversification is key and important.

“Overreliance on a single or very few products is a recipe for disaster. Secondly, diversification through mergers and acquisitions as exhibited by Vision Group helps to grow market share since they now have strong foothold across the country in both electronic and print media,” says Rugaba.

“Vision Group’s diversification and expansion drive ought to be seen as a legitimate plan to increase sales revenue. But sales revenue is just half the story,” he adds.

According to Rugaba, estimates indicate that Vision Group has a head-count of 1,500 workers.

“For long, it has been one of the top employers of choice in the Uganda’s nascent corporate world, but owing to its current financial performance and weak economy, they have no choice but to down size,” he suggests.

“Some functions may have to be integrated; re-aligned and centralized e.g. Human Resource Management, Finance and IT could all be centralized at Head Office. Production planning may also require some new shift configurations to drive factory and operating efficiencies.”

The other big production cost drivers at Vision Group are Utility bills, Advertising commissions, Depreciation of plant, machinery and equipment, machine repairs and promotional expenses.

Utilities cost Shs 1.3bn, Depreciation Shs 4.3bn, and Advertising Commissions Shs 6.4bn for the Financial Year 2012/2013.


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