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 company attributes 2017 poor performance due to:
- 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.
Source: Deacons
