2011 Annual Report and Accounts - Investing In Africa

Chairman’s Statement
Mr. Francis Okomo-Okello
Chairman
On behalf of the Board of Directors of
TPS Eastern Africa Limited (TPSEAL/
the Company/ the Group), it gives me
great pleasure to present to you the
Annual Report and Financial Statements
of the Company for the year ended 31st
December 2011.
Despite the challenges associated with
the global economic crisis and the recent
Euro zone crisis, it has generally been
observed that the Tourism Sector in East
Africa witnessed a positive turnaround
with traditional and new markets
performing relatively better than
year 2010. In the year under review,
demand for traditional safari and beach
holidays steadily increased and this was
complemented by increased activity
within the East African corporate
sector and domestic market segment.
It was however unfortunate that the
leisure and corporate travel bookings
at the Units in Kenya were negatively
impacted during the last quarter 2011
as a result of the travel advisories
issued by foreign government
agencies due to the security situation
which still remains a concern.
Tourist arrivals in Tanzania and
Zanzibar continue to improve with
occupancy and rate levels for the year
2011 recorded at above year 2010
levels which is encouraging.
During the year under review, the
Company continued to face challenging
operating conditions as a result of
the volatile economic environment
characterized by inflationary
pressures due to increased energy
costs, exchange rate fluctuations,
increased interest cost and food
insecurity. In this connection, I wish
to assure you that the centralized
management systems, economies of
scale and cost control measures which
were implemented by the Company
without compromising on product and
operating standards have, in spite of
the above challenges, led to efficient
cost management.
The implementation of the Company’s
business model has enabled it to
overcome the challenging business
landscape for the fourth consecutive year
in the East African Tourism Industry. I am
pleased to report that your Company’s
fundamentals remained healthy and
that your Company maintained its
market position, continued to invest in
product enhancement, expanded the
Group’s operations in the region and
remained competitive by rationalizing
operational costs and identifying new
source markets.
During the year under review, the
Group achieved a turnover of KShs.
5.5 billion (2010: KShs. 4.5 billion), an
improvement of 22% and a Profit Before
Tax of KShs. 853 million (2010: KShs.
693 million), a 23.1% improvement. It is
noteworthy that the total Management
fees received by TPSEAL from TPS
(Uganda) Limited TPS (U) and Tourism
Promotion Services (Rwanda) Limited
TPS (R) for the Year 2011 was equivalent
to KShs. 55 million (2010: KShs. 46
million). Taking all factors into account,
the Company’s performance for the year
2011 is considered commendable.
The Group continues to be a significant
contributor to the revenues of the
Governments of Kenya, Tanzania and
Zanzibar. The Group paid, in aggregate,
the equivalent of KShs. 1,075 million
Room interior at Lake Elmenteita Serena Camp
Swimming Pool at Lake Elmenteita Serena Camp
10 TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2011