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​Poor Christmas Shopping, Delay in Store Opening Lowers Deacons (East Africa) Plc earnings for FY 2016

BY David Indeje · January 4, 2017 06:01 am

East Africa’s leading apparel and household goods retailers, Deacons East Africa, has issued a profit warning for FY 2016.

“The board of Deacons (East Africa) PLC wishes to announce that the earnings for the current financial year are expected to be lower by at least 25 percent than the earnings reported for the same period in 2015.”

The lower earnings are attributed to a ‘comparatively lower Christmas trading season in 2016 and the delay in opening of the Adidas, Bossini and F&F stores at the hub, Karen and the postponement of the launch of the Two Rivers mall to February- next month where ‘the company was fully invested and ready to trade in four flagship stores by September 2016,’ read the notice signed by the J.l.G Magonga, the Company Secretary.

The company plans to use the rise of the middle class and e-commerce to expand its market targeting 4-5 new stores per annum from 33 to 60 by 2020.

Deacons posted a net profit of Sh113.8 million in 2015, driven by a 23 percent jump in revenues which stood at Sh2.4 billion.

Deacons’ net revenue grew 13.2 percent in the first quarter of 2016 to KES 472 million following the opening of 8 stores since the same time last year. Gross margins were good at 53 percent ahead of 2015 full year margins of 47 percent and gross profit margins of 35 percent in the first quarter of 2015.

Deacons opened its first store in 1958 when it was the franchise holder for the Marks & Spencer brand.

Related: Increased Maize Prices Affecting Kenyan Households

 

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_IndejeDavid can be reached on: (020) 528 0222 / Email: info@sokodirectory.com

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