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Uchumi posts rare Sh8.8m profit on China Square rent income
A China Square outlet in Nairobi. Uchumi’s biggest profit boost came from rental income, which jumped nearly fivefold to Sh62.7 million from Sh13.5 million, largely driven by China Square.
Uchumi Supermarkets has posted a rare profit of Sh8.8 million for the year ended June 2025, largely driven by rental income from tenants such as China Square, offering reprieve for the debt-laden retailer, which has been struggling to regain stability.
Management accounts disclosed under the company voluntary arrangement (CVA) show that the net profit was from a loss of Sh49.7 million disclosed in the audited accounts for the year ended June 2024. The Sh8.8 million profit was, however, below the Sh12.85 million that had been targeted.
This marks the first time in years that the debt-ridden retailer has posted a profit, even as it faces risk that the outcome of the legal battle with Kenya Defence Forces (KDF) over the ownership of 17-acre land in Kasarani in Nairobi could make or break its revival.
The CVA report, prepared by Owen Koimburi of the business advisory firm Forvis Mazars Kenya, shows that sales revenue rose during the review period to Sh123.01 million from Sh65.4 million, giving it a 79 percent jump in gross profit to Sh27.7 million. This was after netting off Sh95.31 million as the cost of sales.
However, Uchumi’s biggest boost came from rental income, which jumped nearly fivefold to Sh62.7 million from Sh13.5 million, largely driven by China Square — the low-cost household goods retailer that leased Uchumi’s Lang’ata Hyper branch effective June 2024.
“The company’s growth potential is evident from the financial performance report, which indicates consistent growth to date. Priority should be given to closing the gap between actual and budgeted performance,” said Mr Koimburi in the report.
Currently, Uchumi has 11 tenants paying it a monthly rental income of Sh5.94 million. China Square pays Sh5 million or 84.1 percent of Uchumi’s monthly rent collections, followed by Paris Lounge Grill (Sh300,000), Isle Garden (Sh212,155), Sudo Liquor Store (Sh114,223) and Spatial Barberz (Sh64,655).
Uchumi’s CVA was set up in March 2020, providing a roadmap for settling preferential and unsecured debts over a six-year period ending June 2026. This implies that the CVA status for Uchumi will end next year unless the plan is revised.
The report shows that the company has managed to pay 95 percent of the Sh245.86 million in debts that it planned to settle by the end of the review period.
Banks top the list of beneficiaries, having received Sh146.5 million, followed by trade creditors and landlords (Sh9.84 million), staff salary arrears (Sh6.83 million).
Legal fees and other preliminary expenses have cost Sh62.36 million while the Mazars, which is monitoring the CVA, has earned Sh5 million),
Mr Koimburi cautioned that the success of the CVA hinges heavily on the ongoing legal battle with KDF over the 17-acre piece of land in Kasarani, which Uchumi values at Sh2.38 billion.
In May this year, the High Court ruled in favour of the military over the ownership of the land. However, Uchumi appealed the case and is awaiting the outcome.
“There exists a material uncertainty from the delayed timeline arising from both litigation outcome and the Court of Appeal ... If the appeal fails, CVA may be unviable without fresh capital injection or a new plan,” said Mr Koimburi.
