A Deacons branch in Nairobi. The clothing and household goods retailer is making a fresh bid to list on the Nairobi Securities Exchange. PHOTO | FILE
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Deacons on Tuesday said in a statement it will list at the NSE by way of introduction subject to regulatory approvals.
The retailer registered an 85.3 per cent growth in net profit for the year to December boosted by higher turnover and the sale of its stake in Woolworths’ business in Kenya.
Its net profit in the period stood at Sh113.8 million compared to Sh61.4 million the year before.
Clothing and household goods retailer Deacons is making a fresh push to list on the Nairobi Securities Exchange.
The retailer which has severally postponed plans to list at the Nairobi bourse Tuesday said in a statement it will list at the NSE by way of introduction subject to regulatory approvals.
Listing by introduction is a relatively easier route to the bourse compared to an initial public offering (IPO), which requires more stringent regulatory scrutiny and a favourable timing to avoid under-subscription of the sale.
“On 12th April 2016, the Board of Directors of Deacons Kenya Limited resolved that subject to the Company receiving all regulatory approvals, including but not limited to approval by the Capital Markets Authority (CMA) and the Nairobi Securities Exchange Limited (NSE) as well as an approval by the Shareholders of the Company at the 2016 Annual General Meeting scheduled to be held on 5 May 2016, all of the Ordinary Shares of Kenya Shillings Two and Fifty Cents (Sh2.50) each in the capital of the Company shall be listed by introduction on the Alternative Investment Market Segment (AIMS) of the Nairobi Securities Exchange Limited,” said the retail chain.
Deacons registered an 85.3 per cent growth in net profit for the year to December boosted by higher turnover and the sale of its stake in Woolworths’ business in Kenya. Its net profit in the period stood at Sh113.8 million compared to Sh61.4 million the year before.
It attributed the growth in earnings to a 23.6 per cent jump in sales to Sh2.4 billion, which Deacons’ management said was due to an increase in its regional retail stores count to 31.
Its earnings were further boosted by a Sh64.9 million gain booked from the sale of its remaining 49 per cent stake in a joint marketing venture with South Africa’s Woolworths.
The firm was initially the local exclusive franchise holder for 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.
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