• UCHUMI
  • XUGA:UCHM KAMPALA/Uganda
  • 78.50 UGX
  • 0.00 0.00%
  • As of 2017/05/26
Refreshing....
  • About the Company
  • Uchumi operats retail supermarkets in Kenya, Tanzania and until recently in Uganda. Cross-listed on Nairobi Stock Exchange
  • Uchumi Supermarkets Limited is involved in operating retail supermarkets.

    The Company is engaged in distributing fruit and vegetables, bread and pastries, and a range of local merchandise. The Company has approximately 20 stores, which are located in areas, including Nairobi, Karatina, Meru, Eldoret, Kericho, Juja, Mombasa and Kisumu. The Company has operations in Kenya, Uganda and Tanzania. The Company’s subsidiaries include Uchumi Supermarkets (Uganda) Limited and Uchumi Supermarkets (Tanzania) Limited, which are engaged in the operation of retail supermarkets, and Kasarani Mall Limited, which is principally engaged in property management. The Company offers U Club Card and Gift Card for its customers.

    Address
    Off Nanyuki Road,
    (Industrial Area),
    P.O BOX : 73167
    Nairobi, 00200
    Kenya

    Website
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After a low of $149m in net revenues in 2013, net revenues have grown 7.7% this year slower than last year when they grew at 10%. With this growth they have not recovered to their 5-year peak of £170m
Revenue per year in US $ The higher, the better.
Profits have increased for the last 3 years $47.3m but have not recovered to peak of $51.8m in 2012
Profits per year in US $ The higher, the better.
Profit margins have remained below 30% despite increase in profits indicating a struggle to keep control of costs.
Profit Margin compared to competitors The higher, the better.
Stanbic has maintained return on assets above 3% which is double the global average but is still below the local average.
Management of Assets compared to competitors The higher, the better.
Costs as a percentage of revenue is at 62.82% significantly lower than its peak of 69.85% in 2013. This cost percentage is a lot better than the local average but worse than African average.
Management of Costs compared to competitors The lower, the better.
Cash generation by Stanbic has halved since 2012 but better than 2013 when cash generation was negative due to increased losses in government securities.
Cash Generation compared to competitors The higher, the better.
Assets are currently 90% financed by banks, this may seem high but is similar for both local and African banks. This dependence on debt has reduced slightly over the last few years
Level of Debt compared to competitors The lower, the better.
Stanbic Bank can comfortably cover its immediate debts similar to all local banks. The margin between the liquid assets and current liabilities for Stanbic is lower than other local banks but this has been driven by a drastic increase in customer deposits.
Ability to pay debt compared to competitors The higher, the better.
The available cash (working capital) has increased by 70% over the last 5 years from $112m to $191m. This shows that Stanbic has become more efficient and healthier. This enables that Stanbic to invest more money within the business.
Liquidity/Cash Availability compared to competitors The higher, the better.
Revenues have grown slower than other local banks but the growth in profits has been faster than its local peers. In 2013, Stanbic experienced a 12% drop in profits and 33% drop in revenues, similar to other local banks - this drop in earnings was due to slowdown following the 2011 Ugandan election.
Revenue Growth compared to competitors The higher, the better.
Profit Growth compared to competitors The higher, the better.
Stanbic continues to have pay out the highest level of dividends in Uganda and Africa. Currently Stanbic pays out 3% of its share price but this is half of what it paid out the previous year. This is different from other local banks where dividends have gone back.
Despite Stanbic having high levels of dividend, this drop in dividend yield raises concern about how long this will be sustained.
Return on Equity compared to competitors The higher, the better.
Dividend Yield compared to competitors The higher, the better.
Stanbic Uganda has increased the investment in the business since 2011, and is doing it at the highsest levels both locally and in Africa.
Level of Investment per year in US $ The higher, the better.
Investment Ratio compared to competitors The higher, the better.

Kenya and Uganda have been directed by the East African Community (EAC) to resume talks in a dispute arising from Uchumi Supermarkets’ failure to pay suppliers.

Uchumi exited Uganda in October 2015, closing five branches, and leaving 800 employees and suppliers demanding payments.

Uganda subsequently initiated bilateral talks with Kenya to resolve the issue but Kenya, last year, pulled out saying that the issue was of commercial rather than national importance.

An EAC sectoral council on Trade, Industry, Finance and Investment has, however, directed the two countries to resume talks after Uganda broached the matter at the regional bloc.

“The sectoral council…urged Partner States to undertake bilateral consultations to deal with the said case by 30th June 2017 and report back to the next meeting,” a report from the council states.

Uganda holds that Uchumi’s exit had adverse effects on small businesses and asked the EAC to develop mechanisms to deal with the risks associated with cross-border investment.Uchumi’s chief executive, Julius Kipng’etich, declined to comment on the directive rather saying that are still “discussions going on behind the scenes”, and that he wants to resolve the dispute amicably.

An article in last week’s edition of The Standard on Sunday titled ‘Uchumi stumbles through a maze in its quest to regain glory’ left me with mixed feelings. The gist of the story was that failure by the government to give a Sh1.2b bailout on time and difficulties in disposing off some assets have slowed down the recovery of the struggling firm.

There are many things to be said about the content of the article. I will highlight some issues that stood out for me. First, the government, whose intervention Uchumi is seeking to pull out of its current challenges, is reduced to a ‘bureaucratic red-tape of approvals’ hence a major impediment to the success of the recovery programme.

People generally agree with this slow nature of government processes but when a privately run business is running back to the state for a bailout for the second time, I suppose they would have lost the moral authority to castigate the government.

Secondly, the idea that Uchumi has an advantage of family-owned retailers because it is structured and professionally run creates a false dichotomy. It suggests that family-owned businesses are not professionally managed. This unexamined assertion is completely misleading, as evidence from Kenya’s retail market suggests.

The new business model, if successful, is likely to trigger a chain of reactions by other giant retailers, according to analysts as it will lead to a scramble for the majority low-end shoppers who mainly depend on the largely informal retail industry.

At least two stores running under the brand name Uchumi Xpress are already in operation, with more set to be rolled out.

One is located in the middle of Nairobi’s Mwiki estate in Kasarani area where it is competing for shoppers with local shops.

Uchumi Supermarkets has begun testing a new franchising model ahead of a roll-out later in the year that is expected to offer private and mostly small supermarkets the opportunity to trade under its brand name as it seeks to spring back to profitability.

The new business model, if successful, is likely to trigger a chain of reactions by other giant retailers, according to analysts, as it will lead to a scramble for the majority low-end shoppers who mainly depend on the largely informal retail industry.

At least two stores running under the brand name Uchumi Xpress are already in operation, with more set to be rolled out.

One is located in the middle of Nairobi’s Mwiki estate in Kasarani, where it is competing for shoppers with local shops. The Nation found curious shoppers streaming in, signalling interesting times ahead.

Uchumi chief executive Julius Kipng’etich is, however, tight-lipped about these developments.

“We haven’t rolled out the franchises yet. We will be ready to talk about this in a couple of weeks so it would be too early to shout about it. At the moment we are setting up and testing the systems,” he said.

Retailers are seeking the go-ahead to publish the names and pictures of persons caught shoplifting in their stores in a bid to reduce an estimated annual loss estimated about Sh5 billion.

In a report presented to the State department of Trade, they are also advocating for regulations that will facilitate administration of effective justice on the petty criminals and their networks.

The report forms the basis for ongoing review of the National Trade Policy.

The retailers say in the Study on Kenya Retail Sector Prompt Payment that revenue loss related to shoplifting is one of the leading factors contributing to the rising debt to suppliers.

They complain of an existing cartel of petty offenders who although caught on a regular basis, always find a way out and come back to steal.

“The retailers make arrests of shoplifters and hand them over to the police. However, soon after the arrest, the shoplifter is released on bond and the case takes ages to be finalised,” the report, before Trade PS Chris Kiptoo, states.

The Kenya Retail Analysis report, launched in July 2016, showed the country’s key retailers were losing up to Sh3.5 billion annually to pilferage, with the entire retail sector estimated to incur about Sh5 billion.

Some 15 million shares worth 2.9 million dollars were traded at the Nairobi Securities Exchange (NSE) Monday, down from 19 million valued at 4.7 million dollars the previous trading day as foreign investors slowed down trading.

Safaricom was the most traded stock moving 11.3 million shares at unchanged price of 0.18 U.S. dollars. The stock attracted the most foreign purchases and sales, but other top buys were Equity Bank, East African Breweries Ltd and the Cooperative Bank.

Oil marketer KenolKobil was the second most active stock as it exchanged 1.3 million shares at 0.12 dollars, a decline of 0.3 percent. The stock, however, was mainly traded by local investors.

Equity Bank, Uchumi Supermarket and Barclays Bank were the other top five traded stocks but they did not trade more than a million shares.

The NSE 20 Share Index went down for the third consecutive trading session to 3,106.21 Monday after peaking at 3,128.44 on March 29 while the All Share Index closed higher at 131.50 from 130.61.

After a difficult three years Uchumi has set out a new strategy to turn around the company’s fortunes. This centres on improving its funding, through a government bailout and investment from a new partner, and expanding through a low cost, franchise model. Slow performance

Uchumi has experienced slow performance over the last few years and due to cash flow difficulties has not always been able to pay suppliers. This has led to challenges with suppliers, which have ultimately led to out of stocks. The issue of out of stocks has led to reduced footfall and slower sales growth.

These difficulties have resulted in the government offering a capital injection of KES500m (US$4.8m) in January. Meanwhile, Uchumi also launched a two-and-a-half-year turnaround plan to improve the business.

The measures that were put in place have so far successfully reduced company losses by nearly half in the last six months. New strategy aimed at stabilising performance

Uchumi’s strategy can be broken down into four key areas; 1. Selling assets

Through detailed fiscal management Uchumi closed loss making stores in Uganda, Tanzania and Kenya. Going forwards it will be focusing upon more strategic expansion in better locations. 2. Finding an investor Uchumi is looking […]

Uchumi C.E.O Julius Kipngetich Uchumi Supermarkets is readying itself to return to Uganda and Tanzania, despite having burnt its fingers in the two markets.

The retailer operated in the two countries for five years without profits before throwing in the towel in 2015.

The company, however, is yet to finalise the payment of debts to suppliers in the two markets since it shut down operations.

Uchumi Supermarkets CEO Julius Kipng’etich said the retailer would take a more cautious approach, initially operating one outlet to gauge market sentiment before expanding.

“Our strategy in the two markets was wrong. We took stores in bad locations and that is what affected operations. We havesuffered a case of poor locations in Kenya in the past, but Uganda and Tanzania were the worst,” he said.

He, however, declined to say when the retailer would be going back to the two countries. ALSO READ: Retail giants feeling the pinch amid rapid expansion as new rivals pick up sales Low carbon Dr Kipng’etich, speaking at Uchumi’s Annual General Meeting yesterday, said the company had in January received the first tranche of bailout funds from the Treasury. It expects to receive the second tranche in April or May.

Uchumi Supermarkets is set to receive an additional Sh1.3 billion as taxpayer-funded bailout to shore up its business.

Out of this Treasury will release Sh700 million next month to support its local operations while a further Sh600 million will be disbursed at later date to offset debts the retailer owes suppliers in Uganda and Kenya.

The troubled chain in January received Sh500 million from Treasury to shore up its operations – the first tranche of an initially planned Sh1.2 billion bailout.

“We expect the next tranche (of Sh700 million) shortly hopefully in the month of April or May. There is also a third tranche (of Sh600 million) coming to support Uganda and Tanzania but under a separate package. In total the package will come to Sh1.8 billion,” said Uchumi chief executive Julius Kipng’etich on the sidelines of the retailer’s AGM held in Nairobi.

Uchumi chairman Catherine Ngahu said plans for the sale of stake to a strategic investor in bid to pull the retail chain out of the red are on course.

Kipng’etich said that the company has narrowed down to three investors from a list of 39, who had expressed interest in partnering with the organisation.

The retail store Uchumi Supermarkets is closing down on a strategic investor and partner who will inject Sh5 billion to the company in its turn-around strategy.

Uchumi Chief Executive Officer Julius Kipng’etich yesterday said that the company has narrowed down to three investors from a list of 39, who had expressed interest in partnering with the organisation.

The strategic partner is expected to inject funds for stocking the retailers stores countrywide.

“Plans to have an investor to partner with Uchumi are ongoing and by mid this year, the company will reveal the most suitable investor that we will work with to bring life back to the company,” Kipng’etich said.

The company management said part of its turnaround strategy also includes adoption of a franchising model, funding through a shareholder loan, ICT improvement and supplier support.

“Apart from the strategic investor we will be employing other tactics to make sure that the company manages to make a comeback to profit making,” Kipng’etich said.

Uchumi Supermarkets Limited is involved in operating retail supermarkets.

The Company is engaged in distributing fruit and vegetables, bread and pastries, and a range of local merchandise. The Company has approximately 20 stores, which are located in areas, including Nairobi, Karatina, Meru, Eldoret, Kericho, Juja, Mombasa and Kisumu. The Company has operations in Kenya, Uganda and Tanzania. The Company’s subsidiaries include Uchumi Supermarkets (Uganda) Limited and Uchumi Supermarkets (Tanzania) Limited, which are engaged in the operation of retail supermarkets, and Kasarani Mall Limited, which is principally engaged in property management. The Company offers U Club Card and Gift Card for its customers.

Address
Off Nanyuki Road,
(Industrial Area),
P.O BOX : 73167
Nairobi, 00200
Kenya

Website