Loss-making real estate developer Home Afrika has sacked its CEO, Njoroge Ng’ang’a, nearly two years after he took over the post from his predecessor, Gerald Chege, in November 2013.
The company did not disclose reasons for sending Mr Ng’ang’a packing.
A director of the Nairobi Securities Exchange-listed firm, Dan Awendo, was appointed as the acting chief executive.
“We wish to advise you that the board of directors has terminated the contract of the chief executive officer, Mr Njoroge Ng’ang’a,” reads the statement signed by Home Afrika’s board chairman Lee Karuri.
Mr Awendo is the founder and CEO of Investeq Capital Ltd, a financier and adviser to small and medium-sized firms in Kenya and Uganda.
He is a certified public accountant of Kenya as well as a qualified financial analyst.
Mr Ng’ang’a’s exit tags Home Afrika as one of the NSE-listed firms with high executive turnovers.
His predecessor, Mr Chege, left the company a month after its listing in July 2013 to “pursue other interests”.
The executive changes come at a time when Home Afrika has been pushed deeper into losses by high debt and a slowdown in revenues, which has seen the company lose 92.2 per cent of its market value.
It made a net loss of Sh118.1 million in the half-year ended June, reversing the net profit of Sh42.9 million a year earlier. This came as sales fell 60.6 per cent to Sh216.8 million, reflecting a reduction in property sales.
Its finance costs rose 10.7 times to Sh52.7 million, showing the impact of the Sh500 million bond it issued early in the year at an interest rate of 17 per cent.
The company’s initial offer of a 13.5 per cent coupon did not attract enough investors, forcing it to raise the interest rate on the five-year security.
The company has made a cumulative net loss of Sh126.4 million in the six years ended 2014 but the minority interests in its various property projects have earned a net profit of Sh93.3 million in the same period.
Mr Ng’ang’a recently told the Business Daily that Home Afrika has taken a smaller share of the consolidated earnings because it has shouldered the costs of implementing the projects, including administrative and marketing expenses.
He explained that Home Afrika owns a 60 per cent stake in a typical project, with the other partners holding the remaining 40 per cent.
The company’s performance has seen its share price decline to Sh1.95 as at Wednesday’s close, representing a 92.2 per cent drop from the peak of Sh25 in its first day of trading on July 15, 2013 when it listed by introduction.
The company listed at an offer price of Sh12, which analysts at the time said was too expensive relative to other stocks.
“The counter climbed 108 per cent during Wednesday’s trading to close at Sh25 indicating a price-to-book value of Sh26, price-to-earnings ratio of 60 — which seems an extremely generous valuation for an investment holding company, in our view,” Standard Investment Bank said the next day.