Safaricom's share steady, board tight lipped on Collymore's successor

Safaricom PLC board has said it is confident about the next leader to drive the growth of the company, downplaying on Bob Collymore's successor.

Chairman Nicholas Ng'ang'a said the company has been prepared since the CEO Collymore's illness two year ago and the board is fairly clear on where it wants to go in the long term stewardship of the company and leadership.

“Bob's conditions were discussed at board level. It was aware that soon or later we needed to organise succession for him,” Ng'ang'a said.

He added that Safaricom will honour him by completing the work he was passionate about.

Bob Collymore exit plans from the telecommunications company were first announced in April due to health reasons, but the government’s insistence he should be succeeded by a Kenyan delayed announcing a replacement.

In April, Reuters reported that the board interviewed candidates before settling on an unidentified foreign national from within the Vodafone group to succeed Collymore.

But the government objected, citing an agreement supporting the appointment of a Kenyan as CEO, adopted at a shareholder meeting in 2017.

Choosing a chief executive at Safaricom has always remained the preserve of Britain’s Vodafone, which was the major shareholder in the firm until 2017.

It transferred this powers to South Africa’s Vodacom after a share swap in 2017, which saw it remain with a five per cent stake, while the South African firm ended up with a 35 per cent stake.

This saw the Bob Collymore who was supposed to leave in August due to the illness, contract extended by a year to 2020.

Although the company steered clear on succession, speculations is rife on who will replace Bob Collymore.

Some of the possible names floated around include Sateesh Kamath, current Safaricom's chief financial officer.

Others include Sylvia Mulinge, acting as Safaricom chief customer officer who had been fronted to lead Vodacom Tanzania as CEO but denied a work permit in the East African country.

Joseph Ogutu could also stand the position after standing in for Bob while he was on a nine-month medical leave in late 2017.

Ng'ang'a however said the board will hold a meeting to later in the day to chat forward later in the day.

“It is soon to speak on his successsion but will give announce on the way forward later in 24 hours,” he said.

Yesterday, Safaricom’s share defied news about the demise of Bob Collymore, to trade at a day high of Sh28.50 by 1PM , 1.42 per cent up compared to Friday.

The telco, which is highest capitalised stock on the Nairobi Securities Exchange (NSE) , commanding almost 50 per cent of total market capitalisation had moved 1.38 million shares with a turnover of Sh38.53 million by 1PM from 144 deals.

The share’s bullish nature even on the death of the Collymore perhaps confirms investors’ confidence in the man who has captained the company for the past nine years, helping to grow a the share value from Sh4 in 2010 to a high of Sh32 last year.

It however closed the day at 28.45, having moved 4.83 million shares with  a turnover of 135.99 million from 260 deals, 1.25 per cent up compared to its performance at the close of last week. 

Collymore took over from Michael Joseph in 2010, just two years after the firm had successfully completed floating an Initial Public Offer (IPO) in March 2008 that saw a split and dilution of Mobitelea’s 40 per cent stake in the telco.

This was done to accommodate as many shareholders as possible who bought the shares at the IPO price of Sh5 per share. The company had just 9.2 million subscribers and 700,000 M-Pesa users.

The entry of Collymore’s at Safaricom in 2010 from the parent firm Vodafone he was the governance director has seen the firm to grow firmly, hitting 30 million subscribers in March.

In May, announced a net profit of Sh63.4 billion for the 2018/19 financial year ended March 31.

This was an increase of 14.7 per cent rise compared to the previous year’s Sh45.1 billion.