Nairobi Securities Exchange listed retailer Deacons East Africa Plc issued a profit warning and expects the net earnings for the financial year ending 31 December 2017 to be lower than 25% or more compared to 2016’s earnings.
Deacons was listed on the Nairobi Securities Exchange in 2016. Since listing the company has now issued two profit warnings.
- The uncertainties that were brought about by the presidential elections in Kenya during the second half period of 2017 which resulted to decreased consumer demand and spending.
- The non-performance and closure of some branches of major anchor tenants in several shopping malls which reduced traffic into the shopping malls.
- The prolonged drought that was experienced in the country earlier this year which led to increased inflationary pressure and a reduction in disposable income coupled with the lack of consumer credit from the banks that had a direct impact on consumer spending trends
- The increased availability of retail space which has cannibalized the market thus leading to a decrease in foot traffic into all malls.