Uchumi to publish delayed financial results on Dec 31

Troubled retailer Uchumi Supermarkets now says it will release the delayed annual financials on December 31.

Chief executive Julius Kipngetich said in a public notice that the delay had been occasioned by a “turbulent business environment” and a winding-up petition filed by unpaid suppliers.

The deadline for submission of results set by Kenyan financial authorities is October 31, meaning they will come two months late.

“Uchumi Supermarkets Ltd hereby notifies the investing public that the financial statements for the year ended June 30, 2016, shall be published on or before December 31,” said Mr Kipngetich.

“This is due to the turbulent business environment faced by the company including defending a winding-up petition.”

The Capital Markets Authority (CMA) on Wednesday confirmed it had given the retailer room to clear up its issues before authorising the delay.

“Yes, we granted an extension as the company highlighted several challenges it has faced thus necessitating delay in publication of the results for the financial year ended June 30, 2016,” said CMA.

“They are required to publish a notice highlighting that they will delay publication and also indicate the date that they will publish. The same is to be approved by the authority. We are following up on this to ensure compliance.”

Companies listed on the Nairobi Securities Exchange (NSE) face suspension and delisting in addition to fines for delays in submitting reports.

The retailer had also cited contracting of new external auditors KPMG to take over from Ernst & Young as part of the reasons for the delay.

The change came amid accusations by the current management that Uchumi’s former top managers manipulated last year’s financial statements.

KPMG had been hired to carry out a forensic audit with preliminary findings indicating that former management had manipulated books and concealed losses.

READ: Uchumi results release delayed over change of auditors

Mr Kipngetich, who was brought in to turn around the retailer in August last year, is banking on a multi-pronged turnaround strategy including staff and store rationalisation, disposal of non-core property as well as engagement with suppliers and customers.

The restructuring has seen Uchumi cut its branch network by half and reduce the number of casual workers in a recovery bid. Even then, a growing debt and empty shelves have become a thorn in the flesh of the retailer.

In July this year Uchumi received a boost after the Cabinet approved a Sh1.8 billion bailout.

Uchumi had asked the government, a part owner and founder, for Sh1.2 billion to settle part of the suppliers’ Sh3.6 billion debt, marking the second bailout in a decade.