Home Afrika reports 25pc decline in profit

By Nicholas Waitathu

Kenya: Real estate developer Home Afrika Thursday announced a 25 per cent profit decline for the 2013 period compared to the previous year.

The company attributed the profits decrease to restatement of the financial accounts in accordance with International Financial Reporting Standards.

Chief Executive Njoroge Ng’ang’a explained that if the company had not re-stated the accounts, profits for the review period would have gone up by more than 50 per cent. 

The profits dropped to Sh80.6 million as at the end of the December 2013 compared to Sh108.1 million registered in 2012 financial year. “Profit before tax equally declined to Sh183.4 million during the review period compared to Sh234.5 million recorded in 2012 period,” said Mr Ng’ang’a Thursday.

Deferred income

 “That the projected profit will be lower by 25 per cent compared with the net earnings of the prior year owing to re-allocation of substantial revenue that was previously recognised as income, to deferred income on the balance sheet,” said the company management in a statement  to an investor briefing Thursday.while issuing the warning.

The company first to be listed as Property Development Company at the Nairobi Securities Exchange last year is currently undertaking property projects worth more than Sh20 billion in various parts of the country – Kwale, Kiambu, and Kisumu counties.  However, Ng’ang’a stated that the company gross profits grew by 382 per cent in the review period.

“We earned Sh650 million last year compared to Sh348 Million the previous year,” he added.

The 86 per cent increase in revenue, Ng’ang’a added was demonstration of the company’s improved turnover as a result of prudent investment in flagship projects.

“The cost of sales last year rose by only 6.09 per cent to Sh261.69 million from the previous year’s Sh246.6 million,” said Mr Ng’ang’a.

Investment group

Home Afrika started as an investment group (chamas) some years back is behind the multi-billion shilling Migaa Estate, a live-in golf community in Kiambu County, and is also developing Lakeview Heights in Kisumu, Llango in Kwale County.

The company is currently restructuring its ICT and financial reporting, systems along with improving project management.