Nairobi Business Ventures made a net loss of Sh32.8 million in the period compared to a net profit of Sh4.4 million a year earlier.
This came as sales dropped 45 per cent to Sh46.8 million in what the company blamed on working capital shortfall .
The retailer earlier said there was a delay in securing additional capital to finance its working capital requirements, adding that consumer spending weakened in the second half of the year.
Shoe and leather accessories vendor, Nairobi Business Ventures (NBV) #ticker:NBV, sunk into a loss in the year ended March when sales plunged amid an increase in expenses.
The company made a net loss of Sh32.8 million in the period compared to a net profit of Sh4.4 million a year earlier.
This came as sales dropped 45 per cent to Sh46.8 million in what the company blamed on working capital shortfall at a time when nearly all expense lines rose.
Cost of goods sold increased five per cent to Sh33 million, combining with the sales drop to cut the firm’s gross profit margin to 29.2 per cent from 62.9 per cent.
The fashion retailer earlier said there was a delay in securing additional capital to finance its working capital requirements, adding that consumer spending weakened in the second half of the year.
NBV’s administrative expenses jumped by a third to Sh14 million while other operating expenses increased 9.7 per cent to Sh28.1 million.
Its finance costs fell 60.3 per cent to Sh4.4 million on the back of reduced borrowings and the capping of interest rates which re-priced its bank loans downwards to the maximum of 14 per cent.
The firm’s total borrowings declined to 79.7 million from Sh88.1 million. Shareholder funds dropped to Sh29.1 million from Sh34 million, joining a growing list of publicly traded firms whose net worth has declined in the past one year.
NBV’s share price dropped 4.1 per cent in Monday’s trading when it closed at Sh3.45.This represents a 31 per cent decline from June last year when it listed on the Nairobi Securities Exchange (NSE) at a price of Sh5 per share.
Ahead of the results announcement, NBV made changes to its boardroom. Its chairman Dr Alfred Kithusi resigned and was replaced by Kumar Harshad Sheth. Ms Alice Mutitu was also appointed as a non-executive director of the company.
NBV operates six outlets in Nairobi – two in the CBD and one each at Village Market, T-Mall, Capital Centre and Ongata Rongai under the KShoe brand which targets the upper middle class market.
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