African Investor Relations

I was doing some research into the banking sector in Malawi and had to download the National Bank of Malawi 2007 annual report. A cool 198mb of it, which took a few hours and I have a relatively fast link. The 2010 annual report is posted online in Quark Express – a format that no ordinary person can view without the software which costs a few thousand US$.

National Bank is Malawi’s largest bank and a very strong brand there. It’s a public company and part of the Press Corporation Group, Malawi’s largest conglomerate, also listed on the Malawi Stock Exchange and the London Stock Exchange.

One would think that a dominant bank, with a dominant brand in a dominant group would be keen to accentuate its dominance but it’s bible: the annual report, is accessible only to the most hardened researcher desperate for data. Just trying to get into their website now I have failed.

Malawi is not in a good state politically or economically at the moment and according to www.Internetworldstats.com there are 716,000 internet users there. So is the internet just not worth taking seriously because Malawi is a poor country and no-one uses the Internet? Or is it a case of the Internet is an ideal place to target people with the disposable income and demographic profile with a view to selling them banking and financial services? It’s the latter.

National Bank probably thinks that they have enough day to day interaction with their clients in any event and they do not have to take the Internet seriously. Well NBM’s share of listed banks (Stanbic, FMB) profits has fallen from 63% of total profits in 2005 to 44% in 2010 so one would think that the group would use all available means to reach out to customers and investors. The integrated online communications models of the current day means that you can’t or shouldn’t view an investor as an investor, or a customer as a customer. They are, I dare to say, “stakeholders”. They are everything all in one and a corporate website should be structured to take this into account.

In any modern day corporate strategy the Internet should be a core pillar of marketing and investor outreach. There is one reason that is 100% defensible in this regard. The cost: benefit ratio makes it worthwhile for any company actually.

So posting Quark Express documents and 198mb annual reports is just not on. It’s the basics that African listed companies need to sort out and this isn’t difficult. The absence of annual reports on www.africanfinancials.com is evidence of Africa’s ignorance in dealing with the basics of investor relations and National Bank is an example of part of what’s wrong. Malawi is a country where the Internet should be taken more seriously because of the commercial benefits.

THERE IS AN OPTIMISE PDF FUNCTION IN ADOBE SOFTWARE TO ENABLE LARGE PDFS TO BE CONVERTED INTO SMALLER, EASIER TO USE FILES

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Zimbabwe has 74 listed companies and a well established printing industry and many design professionals that are well versed in designing annual reports. Another plus is there are a few individuals well versed in writing your annual report and project managing the whole process.

Costs of printing in Malawi or Zambia or Botswana can be extraordinarily high and there appears to be a cheaper option to get your annual report printed in Zimbabwe. But there are pitfalls. This blog provides a brief overview of the issues that you need to consider if you do want to get your annual report printed in Zimbabwe. My references to Malawi below may also refer to Botswana and Zambia as the case may be.

• Obviously you need the foreign exchange to pay the printers and designers and approval to pay. Generally printers will charge 30% up front and then require payment upon shipment. This latter point has another side to it and that’s that RBM (Reserve Bank of Malawi) needs proof of the goods coming into the country before the bank is able to pay. So don’t think about cheating on any of the forms about quantities and values and ensure that the Zimbabwean printing company gives you credit.

• Navigating your way around the customs duties gets more and more complicated the more people you speak to. So don’t speak to many people. Annual reports are “printed” material, “not for resale” and have “no commercial value” and so putting them on the airplane or truck from Harare to Lilongwe is hassle free, so long as this is repeated often. Ensure that the boxes are labelled “annual reports” “for shareholders”, “not for resale” and have “no commercial value”. If anyone tells you otherwise, ignore them.

• Air Malawi charges about US$1.5 per kg air freight and 1000 average length annual reports including boxes will weight about 80kg. At National Handling Services,at the Harare International Airport, incredibly friendly staff (George) will use a typewriter, yes a typewriter, to type out your waybill accurately after you complete the Shippers Instructions for Despatch of Goods form. The latter form must state that the goods are not for resale and have no commercial value (repeated again). So your annual reports can be shipped as unaccompanied cargo to Lilongwe or Blantyre direct. One small snag is that you will need the shipment and the invoice stamped by the Malawian customs people for RBM purposes.

• The Zimbabwe Government revenue authorities will charge VAT on the printing even though it’s for export. Because they can. Apparently it is possible to claim this back but I suspect that many barriers will be put in place to ensure that you can’t. If I find out any more about this I will update the blog.

• Using DHL or a similar service to ship you annual reports to Malawi is also an option. BUT I strongly recommend striking up a relationship with an individual in DHL to explain what is happening. Both ways. You explain to them the latest with what’s happening at the printers and collection info – and they explain to you when, where and how they will get the reports to Malawi. They work over the weekends and have a number of options available to them. That said, my experience indicates that someone outside of DHL or your printer MUST project manage the courier and despatch process on a minutiae basis, because unless you see the bigger picture, the smallest detail can de-rail the process.DHL, whilst being a reliable courier service may not be in the loop regarding the last minute issues that are flying around between the printer and the company or the agent project managing the printing process.

• It’s important to ask DHL whether the shipment is going on a commercial Ndege or DHL Ndege. The former has the risk of the Captain removing the load if the plane is too heavy – at his full discretion i.e there is never 100% assurance of delivery on a commercial flight.

• The advantage of using Zimbabwe is that it is a days drive away from Malawi and there are a few Air Malawi flights a week, albeit unreliable ones. My point is that many plans can be made to get the annual reports to Malawi if things go wrong. So long as you stick to your timetable.

• A warning about not sticking to your printing timetable. As you well know printers are at the end of YOUR chaotic timetable and project management process (if you can call it that) and so they take all the flak. They will likely add 20% onto the bill to compensate them for the hassle of you missing your timetabled printing time. Bear this in mind when doing your budget.

• How much do Zimbabwean printers charge? You know, it’s kind of irrelevant. For a listed company its reliability and quality of print that is key. Your annual report is your company’s bible so don’t skimp. Nevertheless, for a good quality annual report 1,000 copies may cost anywhere between US$10,000 and US$14,000 and take 2 – 3 days to produce.

• If these annual reports are to be posted to shareholders in Malawi or distributed in different areas, then I strongly recommend that the sorting into batches to be posted overseas, or regionally, by postal code, happens at the printers. You do not want the hassle of resorting all of the annual reports in your administration office as soon as they arrive. By then your timetable is so blasted out of the water anyway that you can’t afford the hassle.

• So my key piece of advice is to provide plenty of time to get the annual reports to Malawi because each successive deadline that falls by the way side and each successive redundancy initiative that collapses, needs to be backed up by another one. If you know, or suspect, that your company will not stick to the timetable and project management associated with finalising your annual report, then use an outside consultant because they are not distracted by day to day management issues and they can shout at you when you are distracted.

Is it worth it? A few pointers:-

1. - if you are a Malawian company already printing in South Africa – its probably worth it
2. - if you are not happy with the quality of design work or the quality of printing its probably worth it
3. - if you need assistance in writing your annual report then its probably worth it
4. - if foreign exchange is not sacred to you then its probably worth it

I have written another blog about the pitfalls of writing your annual report which you may find interesting and entertaining.

African Is Cool offers annual report writing and annual report project management services. Our online annual report service is a highly professional alternative method to delivering annual reports in hardcopy as reports are delivered on mini CD. Here are 3500 annual reports that appear in electronic format – this same format can be published onto CD.

We also design, host and manage corporate websites on an ongoing basis . Here are our clients.

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