Listed company Sameer Africa is scaling down its operations in Kenya and the region.
The firm is closing down some branches as the tough economic conditions experienced last year overspills to 2020.
The decision to close down the branches was reached during a board of directors of the company held on December 4 last year.
According to a press notice published in local dailies on Saturday, dubbed “cautionary statement” the company which started its operations in 1969 as Firestone East Africa, said the move has been approved by the capital Markets authority.
“This has been necessitated by the need to protect the shareholders’ interests, minimise costs and ensure that the business performance turns round,” read the statement.
The company advised investors and the general public to exercise caution while dealing with the securities of the company.
By close of business on Friday, the company’s stocks were selling at Sh2.58 and at least 7,800 shares exchanged hands at Nairobi Securities Exchange.
Following the decision to close down some of the branches, the tyre manufacturer company announced that a number of workers will be laid off.
However, it did not specify the numbers of workers who will be shown the door.
“Regrettably, the restructuring exercise is likely to involve the laying off of a number of employees,” said the statement.
At the same time the company defended the move saying “the exercise is intended to ring fence the key profit units and shift focus away from the loss making business units, grow the revenue base and capitalise rental segment of the business.”
The statement signed by the company secretary Edgar Imbamba exuded confidence that the measures put in place by the management will support improved future performance by the company.
Unaudited Financial results for the six months ending on June 2019 declined by 20 per cent to Sh900 million from Sh1.2 billion in the first half of 2018 in what the company attributed to “product unavailability.”
The company recorded a declining performance despite reducing its overhead cost to Sh339 million as compared to Sh353 million during the first half of 2018. The company directors did not recommend the payment of interim dividend last year.
Nearly 400 firms were dissolved in the last six months of last year last year according to the data compiled from the Registrar of Companies.
Some of the companies that laid off its workers last year include East African Portland Cement Company, East African Breweries Limited and Stanbic Bank.