Uchumi Supermarkets chairperson Khadija Mire and the general manager for
operations, who is also the incoming acting CEO, Mr Owino Ayodo, at a
press conference on June 15, 2015. PHOTO | DIANA NGILA |
NATION MEDIA GROUP
Uchumi’s profit warning failed to dampen local investor appetite
for its stock as it gained 4.3 per cent to close Monday trading at
Sh8.50.
The retailer was the fifth leading gainer
despite board’s profit warning. The Board Chair, Ms Khadija Mire
announced that the Supermarkets forecast that earnings for the financial
year ending June 2015 will be lower than those recorded in 2014 by at
least 25 per cent.
The company’s regulatory filings
explained that the profit warning was attributed to the expected decline
to working capital challenges faced within the year.
Cash
flow problems which was in June estimated to have held up Sh1 billion
owed to suppliers have strained their working relationship leaving the
retailers almost empty.
“The Board in June also forced
out the top management of Uchumi Supermarkets and is in the process of
replacing it through competitive recruitment,” Ms Mire said.
KIPNGETICH
She
added that after the appointment of the Chief Executive Officer Dr
Julius Kipng’etich and Chief Operating Office Mr Willy Kimani, other
appointments will soon be announced to revamp the governance of the
retail chain.
The Board also noted that they were awaiting for a final report by Deloitte Consultants that will draw up a new business model.
Uganda and Tanzania have continued to contribute to the company’s growth according to the regulatory filling.
Last
year Uchumi reported Sh384 million in profit after tax for the full
year ended June 30 although the figures have now been cast in doubt in
recent revelations.
Analysts say the company used the revaluation of its properties to conceal losses it made in the past two years.
Uchumi
would have been in the loss-making territory from 2013, according to
London-based Exotix and Kenya’s Equity Investment Bank.
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