Longhorn Publishers Plc is to get a fresh capital injection of Sh200 million from the shareholders amid a cash crunch following losses and declining sales in the Kenyan market.
The Nairobi Securities Exchange-listed company says its top shareholder -Centum Investment Company Plc- has issued a letter of support committing to provide its financial support for the next 12 months.
The firm said without the shareholder support and the successful outcome of other projected revenues, its ability to operate as a going concern would be hampered.
‘The group and company’s ability to continue as a going concern is dependent on financial support of the shareholders and the successful outcome of projected revenues,’ it said.
A going concern is a business that is expected to continue operating for the foreseeable future, typically at least 12 months, by meeting its financial obligations and without any intention or need to liquidate or downsize.
Longhorn reported a larger net loss of Sh261.4 million in the year ended June 2025 due to a substantial drop in sales in the Kenyan market, and its current liabilities exceeded the current assets by Sh872.39 million.
The bigger loss, compared to Sh237.9 million a year earlier, extended the company’s dividend drought.
Sales in the review period fell by 55.8 percent to Sh679.8 million, with Longhorn attributing the decline to reduced demand from households and the government.
‘The board approved shareholder support of Sh200 million. The parent company has issued a letter of support committing to provide financial support to the group and company for the next 12 months,’ the firm said through its latest audited financial statements for the year ended June 2025.
‘Subsequent to the year-end, the company has received financial support of Sh30 million from the parent Centum Investment Company Plc.’
Longhorn attributes its losses to a reduction in revenue primarily due to delays in the government procurement process, inventories write-off and impairment of pre-publication costs due to changes in curriculum and provisions for doubtful debts.
The company said its net current liability position is partly attributed to the use of short-term financing to carry out curriculum development projects whose economic benefits will be realised over the long-term, and financing of the working capital cycle due to the time taken to verify deliveries to schools and therefore, receive payment from the government.
‘Once the curriculum development process is completed in 2026/2027, there will be a significant decline in finance costs and borrowings,’ it said.
Longhorn, which is 60.2 percent owned by Centum Investments, is a pan-African publishing house with a presence throughout the region and has operations across African countries, including Uganda, Tanzania, Cameroon, the Democratic Republic of Congo, and Ghana through distributor partnerships.
During the financial year ended June 2024, the group exited from the Malawi, Zambia and Tanzania textbook market to avert further losses and achieve a cost savings of Sh13 million in a year.
Longhorn says it has had a turbulent operating period since the introduction of the Competency-Based Curriculum (CBC) in Kenya, its biggest market.
Between 2018 and 2025 the company invested over Sh714 million in CBC content development, absorbed Sh254 million in inventory and debtor impairments and wrote off Sh149 million in development costs.
Longhorn expects costs to fall and sales to rise going forward as the CBC settles down, adding that it has secured government contracts and anticipates stronger uptake in the private market.
The company’s revenue for the year ended June 2025 decreased by 56 percent to Sh 850 million from a year earlier primarily attributed to the reduced government orders and delay in purchasing by the open market owing to curriculum changes.
The company expects a stronger performance in the current financial year boosted by revenues from the delayed government contracts across the region and purchases from private schools following the approval of all the new titles in 2025.
The company has been facing challenges including the high cost of doing business, reduced consumer demand, rising interest rates, evolving educational curricula and political interruptions, we achieved notable improvements in our financial performance, positioning us well for future growth.
The government remains a key customer of the group, with expected government revenues from supplies to public schools in the current financial year estimated at Sh252 million for Kenya which will be generated from orders for two titles in grades five and eight.
About Sh207.56 million in revenues are expected from Uganda order for Kamusi ya Kiingereza, from which profits will be utilized to settle inter-company debt and further reduce loans in Kenya.