NAIROBI, October 9 – Retail chain Uchumi Supermarkets has returned to profitability after seven years of loss-making, posting a 137 percent increase in profit after tax for the year ending June 30.
Receiver Manager Jonathan Ciano said the retail chain recorded a Sh95 million increase in net profit compared to a loss of Sh256 million last year.
“This is a notable milestone for the chain stores as the last recorded profit was back in 2001 and 2002.The resultant performance is equivalent to 53 cents per share compared to the 2005/6 receivership loss per share of Sh4.17,” Mr Ciano said, attributing the growth to increased sales and redefined business objectives, together with operational efficiency.
"This was despite the higher taxes charged on the packaging materials, higher cost of doing business and the inflationary pressure on our customers,” he observed.
Growth in sales revenue and gross profits went up by 50.8 percent and 61 percent respectively compared to the same period last year.
“That essentially tells you we were not giving the product free; we were buying right and we were selling right so the increase in sale converted to increase in gross profit,” he noted. Operating profits increased by Sh185 million to Sh1.254 billion.
On the strategic partner, Mr Ciano said short listing of the applicants for the position was still ongoing and a name should be announced to the public in the next three weeks.
An initial schedule by the Receiver Manager had indicated that the equity partner was going to be in place by early October. “I’m not in a hurry, my balance sheet looks good, so there is no pressure to get this partner aboard,” Mr Ciano said.
Meanwhile Ciano said the chain will soon be expanding to the coast in an ambitious plan that will see them opening more stores in the country.
“Buruburu and Thika Road should look out for us too,” he said.” We are not going to spend any money in terms of expansion because were not going to own anything. This is what you call expansion without pain, we have my credit terms and the site and building owner, then the only cost that will be related to it, will be the operating cost and if it does not make any profit we close it down.”