Deacons to list at Nairobi bourse before end of year
Posted Wednesday, January 18 2012 at 20:19
Deacons Kenya has set a target of listing at the Nairobi Securities Exchange by the third-quarter of this year, becoming the third firm to announce plans to go public.
The clothing and lifestyle goods retailer initially announced plans to list at the stock market in 2010 after raising Sh700 million in a public share sale. Its share is currently traded at the over-the-counter market.
“It is dependent on regulatory approval but we hope no later than the third quarter,” said Muchiri Wahome, the Deacons chief executive.
He declined to say whether the firm had appointed a fresh team of transaction advisers to handle the listing.
Standard Investment Bank and Kestrel Capital were the lead transaction advisers for the 2010 share sale.
Hamilton Harrison and Mathews were legal advisers, Barclays the receiving bank, Deloitte the reporting accountants and Hill and Knowlton the public relations handlers.
Mr Wahome said the company would list its share on the Alternative Investment Market Segment of the NSE if it failed to increase its shareholder numbers to at least 1,000, the minimum requirement for listing on the main market board.
The shareholders register increased to 487 from 18 after the share sale.
He said that Deacons’ sales volumes had been hit by hard economic times that have seen people cut back on spending.
The retailer, however, still recorded growth in the six months ending June last year, in which it announced a 73.3 per cent increase in net earnings to Sh45.6 million. Revenues increased to Sh1 billion from Sh745 million in the previous year.
Mr Wahome said 2012 is expected to be an even tougher for dealers of consumers goods.
“We expect a challenging year ahead,” he said after rewarding winners in a customers’ competition at Woolworths Yaya Centre.
Increased energy costs, rising interest rates and inflation last saw customers change their spending habits with the retailer noticing a change in people’s shopping basket.
Despite the tough environment the retailer has projected a 37 per cent growth in 2012.
In 2011 Deacons opened eight new stores – two in Rwanda, five at Junction Shopping Mall and one in Mombasa.
In the last quarter of 2011 the retailer invested Sh120 million to open Mr Price and Mr Price Home outlets in Kigali, Rwanda. Currently, the company is looking at how the stores perform before introducing other brands in this market.