Express Kenya auditor raises red flag as debts exceed assets

An Express Kenya truck. FILE PHOTO | NMG
An Express Kenya truck. FILE PHOTO | NMG 

Logistics firm Express Kenya’s #ticker:XPRS debts have exceeded assets in the half-year to June 2017, making it the third listed company on the Nairobi bourse to slide into negative equity position.

Its current liabilities exceed its current assets by Sh11.9 million in the six-month period, meaning Express Kenya shareholders would not get a cent today if the company is wound up.

Troubled retailer Uchumi #ticker:UCHM and loss-making national carrier Kenya Airways #ticker:KQ are the other listed firms with more liabilities than assets, meaning they are technically insolvent.

PKF Kenya, the company’s external auditors, have warned that the heavy debt load is a risk to the continued operation of loss-making Express Kenya.

The negative equity position “indicates that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern” said Darshan Prabhulal Shah, a partner at PKF, in Express Kenya’s latest annual report.

Express Kenya’s current liabilities exceeded its current assets by Sh16.9 million as at end of full-year to December 2016, the first time it fell into a negative equity position.

The logistics and warehousing company made a half-year net loss of Sh31.1 million compared to being Sh26.8 million in the red as at June 2016.
Revenue remained flat at Sh35.07 million as at June 2017 from Sh34.66 million in a similar period a year earlier, a growth of 1.2 per cent.