7th December 2018
Fountain Enterprise Program (FEP) Group announced its new multi-year strategy dubbed ‘FEP Mpya’, on Friday, setting ambitious targets to achieve by the year 2021 as it seeks to streamline its operations and foster investment growth.
The new strategy is structured around seven key priorities: strengthen corporate governance at FEP Holdings and FEP Society, maintain efficient operations, improve investment decision-making process, re-invigorate the membership base and ecosystem, develop clear funding and financing strategy, strengthen the FEP brand, and uphold an ethical high performance-oriented organization culture.
The goals set for that period include growing the Group’s total assets more than two-fold from KShs. 4.15B to KShs. 9.5B in the three years from 2019 to 2021, reach an investment return rate of 20% per annum, pay dividends of between 10% to 25% of 2021 net profits after tax and achieve an employee engagement level of 85% by 2021.
“We have conducted a rigorous assessment of the entire FEP Group ecosystem aimed at identifying areas to rationalize expenses, accelerate revenue growth and improve profitability”, said FEP Group Founder, President and Group Executive Director Dr. John Kithaka in a statement to media.
‘FEP Mpya’ is the outcome of this effort and provides a comprehensive blueprint for cost reduction, investment rationalization, infrastructure optimization and deploying innovative approaches to corporate governance and to meet the unique needs of Fountain Group’s core target markets.
The Group, added Dr. Kithaka, believes that the new strategic plan will turn around the fortunes of its various investments and subsidiaries and ultimately its overall commitment to grow the generational wealth of its members and shareholders. In 2017, the Group recorded an operating loss of KShs 702 million rising nearly five times the KShs 148 million posted in 2016. “This result consisted of KShs 551 million that we provisioned as debts owed to us but had not been paid at the time,” explained Dr. Kithaka.
FEP Group will continue on its aggressive cost reduction path to ensure that it arrives at a break-even point in the first year of the new strategy. “As an investment company, the previous results eroded our capital and our first priority was to stop bleeding by bringing down overall expenses from KShs 47 million in 2016 to only KShs 13 million in 2017”, he noted.
Kithaka revealed that “Going forward, FEP will focus on the following 5 key pillars for business - Investment, Real Estate, Savings & Loans, Insurance, and Hotels."
He added that FEP’s confidence in achieving the ambitious business targets is “derived from its flagship 4-Star Suntec Sagana Hotel currently under development and scheduled for launch in early 2019, and strength in Real Estate - Kisima Lukenya Project and the Kiwegu Resort in the South Coast among others.”
As the new strategic plan for FEP Group is rolled out, Dr. Kithaka is optimistic that in fixing and stabilizing its investments, it will be able to focus and actively pursue opportunities in emerging and growth sectors of Kenya’s economy, including financial services, real estate, energy, technology and hospitality