Supermarket chain Naivas reported an 18.7 percent drop in net profit to Sh1.87 billion in the year ended June 2024 as growth of expenses outpaced that of revenue.
The retailer’s net income stood at Sh2.3 billion a year earlier
Disclosures by Mauritian conglomerate IBL Group, which leads a consortium that owns a majority stake in Naivas, show that the retailer’s sales rose by 3.5 percent to Sh92.74 billion (33.12 billion Mauritian rupees), while expenses rose by 4.1 percent to Sh90.87 billion (32.46 billion rupees).
The earnings put Naivas’ net margin at two percent in the period, down from 2.56 percent a year earlier.
Naivas has nearly doubled its sales over the last four years —having grossed Sh54 billion in 2020— on the back of rapid expansion that saw it open 12 new branches in the year to June.
“Naivas has shown strong growth, despite facing challenges such as the depreciation of the Kenyan shilling, some political unrest and a very competitive retail landscape. It has continued to expand dynamically, with a retail network now spanning 106 outlets in prime locations across Kenya,” said IBL Group chief executive officer Arnaud Lagesse in the firm’s annual report for 2024.
The chain’s total assets shrunk by 0.6 percent in the period to Sh31.57 billion, while liabilities declined by 1.3 percent to Sh24.65 billion, giving it a net book value of Sh6.92 billion.
Established in 1990, Naivas has grown to become the largest supermarket chain in Kenya with a network of 106 branches and more than 10,000 employees.
IBL owns an indirect stake of 37.33 percent in Naivas, held through an investment vehicle known as Mambo Retail which is co-owned with French fund Proparco and German fund DEG. IBL holds a 73.2 percent stake in Mambo Retail, which in turn owns a 51 percent stake in Naivas.
In 2022, IBL and the two funds acquired a 31.5 percent stake in the retailer from a consortium comprising the International Finance Corporation (IFC), DEG and private equity firms Amethis and MCB Equity Fund for a consideration of $119.68 million (Sh15.5 billion at today’s rate).
DEG reinvested in Naivas alongside IBL and Proparco immediately after being bought out along with the earlier investors—IFC and the PE funds.
The IBL investor group also acquired an additional 8.5 percent stake from the family of Naivas founder Peter Mukuha Kago for $32.29 million (Sh4.17 billion), taking the total cost of the 40 percent stake to $151.97 million (Sh19.6 billion).
In 2023, IBL and the two funds bought an additional 11 percent in the retailer from the Mukuha family for an estimated $41.7 million (Sh5.38 billion), allowing foreign investors to take controlling ownership of the chain for the first time.
