The auditor has issued a disclaimer of opinion on group financial statements citing lack of audit evidence on foreign subsidiaries up to the date of loss of control/FILE
NAIROBI, Kenya, Jan 31 – After delaying announcing of results twice, Uchumi Supermarkets has published its 2016 full year results for the year ending June 2016, posting Sh2.8 billion loss narrowing by 17.6 percent compared to Sh3.5 billion loss posted in 2015.
The performance was attributable to 31.7 percent decline in operating expenses as the ongoing turnaround strategy which involves; adoption of a franchising model, working capital funding through shareholder loans and re-negotiation of supplier contracts takes form.
Revenue declined by 50.4 percent, a second straight year decline to hit Sh6.4 billion from Sh12.9 billion posted in 2015 while Finance costs went up by 17 percent to Sh411 million in 2016 up from Sh335 million in 2015.
In 2015, the retailer closed its regional subsidiaries in Uganda and Tanzania where it was operating six and five branches respectively and closed two branches in Kenya.
This coupled with supply chain challenges due to delayed supplier payments in Kenya led to the large decline in revenue.
The auditor has issued a disclaimer of opinion on group financial statements citing lack of audit evidence on foreign subsidiaries up to the date of loss of control and qualified opinion on company financial statement on lack of audit evidence on property and equipment’s opening balances.
The directors do not recommend the payment of a final dividend for the period.
“The board and management are focusing on a turnaround strategy, which include adoption of a franchising model, funding through shareholders loan, ICT improvement and supplier support. The search for a strategic investor is ongoing. Discussions are ongoing with several potential partners and the board is hopeful that the discussions will be concluded in 2017,” the firm said in a statement.
