Monday, February 23, 2009

Crunch time for supermarket

Over the weekend, the Receiver/Manager team of Uchumi Supermarkets (under receivership) published their six month accounts for the ½ year to December 2008

- P&L: Sales Kshs. 4.43 billion ($55 million - up 30%), gross profit 845 million (up 20%), operating expenses 676m (up 24%), financial 99m (unchanged), pre tax profit 69 million (up 10% from 63m in December 07)
- Balance sheet: fixed asset 706 million (down 7%), current assets 1,123 million (up 20%), current liabilities 1,742 million (up 57%), net current assets (-619 million), total assets 87 million (down 85% from 589m in December 07).
Liabilities: capital 900 million, reserves -1,835 million, loans 1,021 million (down 36%), total liabilities 86 million

The attached notes state that cash & equivalents were 130 million, debenture holders were paid 23m, and principal banks have received 346m to date (including 16m in the last 6 months).

However, despite increased sales, basket size, customer numbers and product ranges, the statement notes the urgent need to address the technical solvency challenges in the balance sheet through
- restructuring of some secured obligations (bank loans)
- increased equity from shareholders,
- or failure to that, (imminent) invitation to third parties (search for strategic investor is ongoing ).

The ultimate objective of Uchumi receivership plan (URP) is re-listing at the Nairobi Stock Exchange (NSE)

8 comments:

coldtusker said...

And the tougher times are just starting... I do hope Uchumi gets traction going coz we need a counterweight to Nakumatt.

Unknown said...

NSE doesn't look attractive anymore.

Anonymous said...

Ok, here's a troubled company doing well. what does that mean?

- Retail market is fine. Remember Nakumatt announcing record sales in Dec? could have been hype since their books are not public. but still...

- If retail is fine.. people are still consuming.

- people are consuming coz they have not adjusted their lifestyle for hard times.

- this means for most people - nothing has changed.

Good. Lets see how other sectors turn out.

Anonymous said...

@Kainvestor: Really? Looks more and more attractive to me!

@CT I disagree. If it walks like a duck, quacks like a duck, swims like a duck.. economy is fine.

:-)

bankelele said...

Coldtusker: I think the stores are doing as well as possible (I’m a frequent shopper) but the legacy of debt and losses needs new capital to sort out

Kainvestor: no it doesn’t. I wonder if we can get bailed out like Nigeria is planning

Maishinski: I too am ready to buy more, Safcom at 2.90, and others.

Anonymous said...

@Anon
Higher sales does not really mean that retail is doing fine, you need to factor in the fact that prices on most items were adjusted upwards end of last year, and if you were to compare revenues then you would need to compensate for the higher prices to get an accurate assesment of where retail is headed.
@maishinski
Everyone else has forecasted a slowdown in the economy, but you seem very upbeat and optimistic that economy is fine. Care to share what you might know that we dont?

Anonymous said...

@Mashatall,

If it walks like a duck, looks like a duck, quacks like a duck, swims like a duck... how can it be a chicken?

Sometimes the obvious choice is the right choice.

Anonymous said...

KPLC makes a profit.. 15% growth in consumption.

Who's using the electricity? Shouldn't they have switched off if times were bad?

LinkWithin

Related Posts with Thumbnails