Uchumi to delay release of results until December

Uchumi to delay release of results until December

Uchumi Supermarkets says it will delay the publication of its audited financials for the year ending 30th June 2016.

Through a notice to investors the firm’s Chief Executive Officer Dr Julius Kipng’etich says the statements will be published on or before the 31st of December this year.

“This is due to the turbulent business environment faced by the company including defending a winding up petition,” Dr Kipng’etich said in the notice to investors.

The move has been necessitated by turbulent business environment engulfing the company including a legal suit seeking to wind up the retailer.

Companies listed on the Nairobi Securities Exchange are expected to publish their audited accounts at least four months after the close of the financial year.

The Capital Markets Authority (CMA) has sanctioned the delayed release of results, giving Uchumi time to get its house in order. Companies that fail to get authorization from the regulator face numerous sanctions including the risk of being de-listed.

The retailer also brought on board KPMG as its auditor, further delaying the release of the results.

Since joining Uchumi in August 2015, Dr Kipng’etich has focused on stemming revenue losses and renegotiating payment terms with suppliers.

This saw Uchumi shut down its subsidiaries in Uganda and Tanzania as well as the closure of at least nine branches in Kenya.

Uchumi owes its suppliers Sh3.6 billion which led to a section moving o court seeking to liquidate the company to recover their dues.

The 40 year old retailer reached an out of court settlement with the aggrieved retailers and even plans to convert Sh1.8 billion of the debt into equity in the company.

Uchumi reported a half year loss of Sh1 billion shillings with revenues dropping to Sh4.3 billion.

Uchumi has ditched plans to engage strategic investors to inject Sh5 billion into the business, in favor of a Sh1.2 billion bailout package from the government.

The government has however set out tough conditions, including the prosecution of those that led to the financial mess, before releasing the funds.

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Story By Patrick Igunza
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