Deacons has registered an 85.3 per cent growth in net profit for the year to December on higher revenues and the sale of its stake in Woolworths’ business in Kenya.
The clothing and household goods retailer has announced that its net profit in the period stood at Sh113.8 million compared to Sh61.4 million the year before.
This growth is attributable to a 23.6 per cent jump in sales to Sh2.4 billion, which Deacons’ management said was due to an increase in regional retail stores to 31.
Earnings were further boosted by a Sh64.9 million gain which Deacons booked after selling its remaining 49 per cent stake in a joint marketing venture with South Africa’s Woolworths.
“Revenue was up 24 per cent… driven by the opening of the Bossini and Mr Price store in Acacia Mall, Kampala, and Garden City Mall, Thika Road, bringing the total footprint for the group to 31 stores,” Deacons said in a statement.
The firm was initially the local exclusive franchise holder of the Woolworths brand of clothes but the South African firm in 2012 decided to distribute its merchandise through a joint venture called Woolworth’s Kenya Proprietary Limited.
The multinational took a controlling 51 per cent stake in the joint venture in 2013, leaving Deacons with 49 per cent equity and management rights in the new outfit.
The gain of Sh64.9 million from the Woolworths Kenya’s divestiture follows a gain of Sh405.8 million in the previous year when Deacons sold the stake in the joint venture to the South African firm.
“This (divestiture) was a strategic initiative in order to invest and focus the trading initiatives into wholly owned brands franchises,” Deacons said.
Deacons recently opened an Adidas/Reebok outlet and a Bossini store at The HUB in Karen and plans to launch four stores at the Two Rivers Mall as well as a Mr Price and a Bossini store at the Kigali Heights mall in Rwanda.
The company’s board recommended the payment of a first dividend of 50 cents per share.