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Uchumi - A value play?
Rank: Elder Joined: 12/4/2009 Posts: 10,809 Location: NAIROBI
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@Plimsoul Out of that revenue how much profit did they make and how much debt do they have in their books Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 3/3/2016 Posts: 132
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Ericsson wrote:@Plimsoul
Out of that revenue how much profit did they make and how much debt do they have in their books Oh, their accounts are quite private. I have no idea though I'd love to know myself. Maybe someone else here might know?
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Rank: Member Joined: 3/3/2016 Posts: 132
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Ericsson wrote:@Plimsoul
Out of that revenue how much profit did they make and how much debt do they have in their books Actually here are some numbers for 2014: Revenue: 51.6 billion PBT: 305 million (823 million 2013, westgate?) Debt: 15 billion From a BD article: http://www.businessdaily...08/-/x9i5cz/-/index.html
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Rank: Chief Joined: 1/3/2007 Posts: 18,354 Location: Nairobi
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Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 3/3/2016 Posts: 132
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VituVingiSana wrote:Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). Yeah, I saw the Sh 15 billion in debt. It's possible they're abusing their market dominance to shortchange suppliers and not necessarily because of cash flow problems. But I don't really know much about them. I'd love access to their financials. Still, I think a company with that much revenue should definitely be listed. If nothing else, it'll be a great source of information for what's happening in the real economy. Plus it'll make it easier to raise capital for them, equity or debt.
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Rank: Chief Joined: 1/3/2007 Posts: 18,354 Location: Nairobi
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Plimsoul wrote:VituVingiSana wrote:Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). Yeah, I saw the Sh 15 billion in debt. It's possible they're abusing their market dominance to shortchange suppliers and not necessarily because of cash flow problems. But I don't really know much about them. I'd love access to their financials. Still, I think a company with that much revenue should definitely be listed. If nothing else, it'll be a great source of information for what's happening in the real economy. Plus it'll make it easier to raise capital for them, equity or debt. Equity: The negativity associated with a public listing can be a hindrance. Today, Nakumatt can find a PE firm to invest in it quietly. No drama. If it was listed and wanted to sell a stake to a Strategic Investor, it needs shareholder approval at AGM/EGM, CMA approval, etc. Plus it needs to publish information that its competitors will look at. Debt: How many firms raise 'public' debt? Very few. Most go to banks since banks are more flexible and can structure a loan as needed. Even Berkshire Hathaway, in many ways, acts as a 'private' firm and raises most of its loans from banks though it does issue debt if needed. In Kenya, the process for issuing a (listed) bond can take a while & costs quite a bit. Pay CMA, NSE, brokers, advertise, etc. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 3/3/2016 Posts: 132
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VituVingiSana wrote:Plimsoul wrote:VituVingiSana wrote:Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). Yeah, I saw the Sh 15 billion in debt. It's possible they're abusing their market dominance to shortchange suppliers and not necessarily because of cash flow problems. But I don't really know much about them. I'd love access to their financials. Still, I think a company with that much revenue should definitely be listed. If nothing else, it'll be a great source of information for what's happening in the real economy. Plus it'll make it easier to raise capital for them, equity or debt. Equity: The negativity associated with a public listing can be a hindrance. Today, Nakumatt can find a PE firm to invest in it quietly. No drama. If it was listed and wanted to sell a stake to a Strategic Investor, it needs shareholder approval at AGM/EGM, CMA approval, etc. Plus it needs to publish information that its competitors will look at. Debt: How many firms raise 'public' debt? Very few. Most go to banks since banks are more flexible and can structure a loan as needed. Even Berkshire Hathaway, in many ways, acts as a 'private' firm and raises most of its loans from banks though it does issue debt if needed. In Kenya, the process for issuing a (listed) bond can take a while & costs quite a bit. Pay CMA, NSE, brokers, advertise, etc. Wow, you are incredibly pessimistic. Have some faith in our capital markets. If a brand is strong enough, like I think Nakumatt is, listing only lifts it higher, it doesn't weigh it down at all. Like Safaricom, EABL. I think KCB and Equity would have less respect, as it were, if they were not listed. Strategic investors, and private equity investments mean significant loss of control and setting off in a whole new direction. But even then, its possible to do that either in the Scangroup did it, or Access Kenya and CMC (not the best example). KCB aims to raise Sh 10 billion through a rights issue. I don't see how they would have done that easily as a private company, especially coming only a few years after its last capital raise. As for debt, that hassle is worth it to access longer term bonds at favourable rates I think. Think Centum. I doubt bank loans would have been attractive for those projects. There's so much money in the economy chasing few investment options that I would welcome large, profitable, well run businesses to list. Not the tiny GEMS type. Those can stay private.
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Rank: Chief Joined: 1/3/2007 Posts: 18,354 Location: Nairobi
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Plimsoul wrote:VituVingiSana wrote:Plimsoul wrote:VituVingiSana wrote:Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). Yeah, I saw the Sh 15 billion in debt. It's possible they're abusing their market dominance to shortchange suppliers and not necessarily because of cash flow problems. But I don't really know much about them. I'd love access to their financials. Still, I think a company with that much revenue should definitely be listed. If nothing else, it'll be a great source of information for what's happening in the real economy. Plus it'll make it easier to raise capital for them, equity or debt. Equity: The negativity associated with a public listing can be a hindrance. Today, Nakumatt can find a PE firm to invest in it quietly. No drama. If it was listed and wanted to sell a stake to a Strategic Investor, it needs shareholder approval at AGM/EGM, CMA approval, etc. Plus it needs to publish information that its competitors will look at. Debt: How many firms raise 'public' debt? Very few. Most go to banks since banks are more flexible and can structure a loan as needed. Even Berkshire Hathaway, in many ways, acts as a 'private' firm and raises most of its loans from banks though it does issue debt if needed. In Kenya, the process for issuing a (listed) bond can take a while & costs quite a bit. Pay CMA, NSE, brokers, advertise, etc. Wow, you are incredibly pessimistic. Have some faith in our capital markets. If a brand is strong enough, like I think Nakumatt is, listing only lifts it higher, it doesn't weigh it down at all. Like Safaricom, EABL. I think KCB and Equity would have less respect, as it were, if they were not listed. Strategic investors, and private equity investments mean significant loss of control and setting off in a whole new direction. But even then, its possible to do that either in the Scangroup did it, or Access Kenya and CMC (not the best example). KCB aims to raise Sh 10 billion through a rights issue. I don't see how they would have done that easily as a private company, especially coming only a few years after its last capital raise. As for debt, that hassle is worth it to access longer term bonds at favourable rates I think. Think Centum. I doubt bank loans would have been attractive for those projects. There's so much money in the economy chasing few investment options that I would welcome large, profitable, well run businesses to list. Not the tiny GEMS type. Those can stay private. Safaricom listed coz GoK wanted some cash. Safaricom was not a IPO but an Offer To Sell. No cash was raised for the firm but the proceeds went to GoK. Vodafone did not sell a single share and even acquired more. ScanGroup's listing was strategic by Thakrar. He took it public and slowly got WPP to buy into ScanGroup while padding his nest egg. Very smart. He can retire with a few billions. Access went public to raise money but also to allow the Somens to cash in. Then it went private again. CMC was public but now private. Private firms have Rights Issues. We just don't hear of them as much. Look at Family Bank and Jamii Bora. Rights Issues are geared towards existing shareholders so it matters little whether the firm is listed or not. Centum - Centum has and continues to borrow from banks. Unless there is a compelling reason there is no need for a large, profitable and well-run business to list. Many of these firms will list when the founders and their families want out of the business or they want to cash in some of the shares. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 8/15/2015 Posts: 817
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VituVingiSana wrote:Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). it must suck doing business with nakumatt.
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Rank: Member Joined: 8/27/2015 Posts: 138 Location: Harare
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Cornelius Vanderbilt wrote:VituVingiSana wrote:Careful. They have a lot of debt. Suppliers are bitching about late/delayed payments by Nakumatt. It just happens there is no effective or substantial competitor so Nakumatt rules the roost. The retail supermarket biashara is tough with lots of fixed costs. Even Warren Buffett got burned with Tesco (UK). it must suck doing business with nakumatt. Supplier Financing 101 Investment philosophy development in progress...
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