Michael Kampani: The business turnaround wizard
The financial reporting season is upon us with many Botswana Stock Exchange (BSE) listed companies sharing their financial performance with their shareholders. That trading conditions have been difficult for every sector of the economy cannot be overemphasised given the modest economic growth. This reflects in the performance of major BSE players. Barclays Bank Botswana grew its earnings by 5.6% for the year ended December 2014, Botswana Insurance Holdings Limited is at 4%, Choppies at 21%, and First National Bank Botswana and Standard Chartered Bank are at -5% and 21% respectively, for their half year results.
However, G4S Botswana came all guns blazing and announced a 498.5% leap in profit before tax, 25% reduction in overhead costs, 498% rise in equity per share, and a hefty dividend payout of over P16 million when compared to the previous year’s P5.6 million. The company, which only last year was in the doldrums, is headed by one Michael Lazarous Kampani. The BSE listed company has a market capitalisation of over P268 million. Kampani assumed the position of Managing Director (MD) in July 2013, inheriting a company which profits were in consistent and rapid decline. The company’s profit before tax had dropped 69% from P29,231 million in 2012 to 9,086 million. The profits dropped further to the lowest the company ever garnered of P6,251 million in 2013, the year Kampani assumed office. Though the company’s revenue growth had seen a marginal growth of 0.7%, there was nothing else to highlight. The company’s net earnings attributable to shareholders had dropped 31,9%, impairment on trade receivables were going through the roof, there was a sharp decline in investment income as the company had invested dizzying sums of money in the acquisition of a facilities management company, which brought about a ‘headache’ with the protracted licensing matter.
G4S quality of service was also declining with the alarm response time assuming the pace of a snail which resulted in loss of market share in some areas of operation. The young MD, 45 years old at the time, and less than a year at the helm, stood up to face the media and present the results, and there was media frenzy. News media were awash with such adjectives as unpleasant, unimpressive, dented, uninspiring, dismal etc. in an attempt to paint the dull picture that was the G4S results for the year ended December 2013. Fast forward to March 2014, the same MD is presenting a whole different type of results for the year ended December 2014. There is a dramatic change in every variable worth a note, and the trend is on the up with a 6.5% growth in revenue, 498.5% leap in profit before tax, 25% reduction in overhead costs, 498% rise in equity per share, and a hefty increase in dividend paid out of over P16 million when compared to the previous year’s P5.6 million.
And all this happened in just one fiscal year. This performance then begs the question, who is Michael Kampani? Kampani is a 46 year old Malawian, a widower, and proud father of two. He is soft spoken, of very cool and calm demeanour, humble, and a religious man. He graduated with a B.Com (Accounting) degree from the University of Malawi, then studied further to qualify and join both the Chartered Global Management Accountant (CGMA) and the Chartered Institute of Management Accountants (CIMA) bodies. He started his career at Cargill Malawi Ltd – NSCM Seed Division as a trainee accountant before joining Dzuka Publishing Company & Times Bookshops Ltd (Malawi) as an accountant. He joined G4S Malawi as a Chief Accountant in 1999. He was promoted to the position of Group Financial Controller and sent to G4S Botswana, where a year later was made Finance Director. In 2011, Kampani was sent to the Africa region office in Pretoria, South Africa, to take the position of Regional Financial Controller, and two years later, in 2013, was brought back to Botswana as MD to turnaround fortunes of G4S Botswana, which clearly was on a high speed run into the ground. And turn them around he did.
For obvious reasons, Kampani is G4S Group’s ‘blue-eyed’ boy, and this is demonstrated by his nomination and participation in the G4S International Leadership Programme, and being awarded the inaugural G4S Africa President’s Special Award in 2012 for exceptional performance. Kampani has authored a booklet on Finance for Non Finance Managers in March 2010 and he runs training workshops for non-finance managers in both Malawi and Botswana. We continue to observe G4S with great interest for more of Kampani’s wizardry.