In a paid advertisement appearing in today’s papers, Nakumatt sets out to correct some inaccuracies mainly in the financial numbers that have been mention in the media comparing the recent performance and taxation between Nakumatt and Uchumi

Turnover Nakumatt’s was not 20X times Uchumi’s and they have always had fewer stores than Uchumi. They have gone from 7 stores in 1997 to 17 today while Uchumi has gone from 14 in 1997 to 30 in 2004 and down to the 17 which they closed on June 1. Nakumatt had lower turnover up till 2005 – their 1997 sales of 2.7 billion shillings (2.7b) rose to 7.1b in 2004, 11b in 2005 and estimated 11b in 2006 while Uchumi’s rose from 5.2b to a high of 8.9b in 2003 before dropping back to 5b in 2005 with the closure of 13 stores.

Profitability Nakumatt made profits of 60 million shillings (60m) in ‘97 and ‘98 each, lost about 200m each year (401m in 2000) from ’99 to 2002 and returned to profitability in 2003 (111m), 140m in ‘04, 287m in 05 and an estimated 459m in 2006 while Uchumi had increasing losses from -246m in ’03, -654m in ’04, -1.2 billion in ’05 and an estimated 600m in ’06.

Inspection Nakumatt say all their suppliers are compliant with the Kenya Bureau of Standards, which is not entirely true as many of their goods are imported and have not been verified for the last few years.

Taxes Claims they paid 21m in ‘04, 222m in ‘05 and 383m in ’06, and are ETR compliant. Electronic tax registers (ETR) were introduced by KRA to ensure VAT amounts collected were remitted to the government.

Outlook
The statement is a commendable start by Nakumatt which needs to do a lot more on the PR front. It is assuring that they have stated that they employ 3,000 Kenyans, have 600 local suppliers and that their books are audited by Deloitte & Touche.

The company needs to be more open in its dealings with the public since their image which has taken a public battering from parliamentarians and money laundering allegations. They should make more mileage from their philanthropic efforts, hire a spokesman or firm, and put forward a board of directors, preferably with a reputable Kenyan as Chairman to be the corporate face of the company.

Uchumi
I don’t put much faith in the recovery of Uchumi which has lost so much ground to other supermarkets. If it ever reappears on the stock exchange I’d sell my 500 shares immediately. The Nakumatt statement claims that they currently have an estimated stock of 3.1b compared to Uchumi’s 330m – which paints a bleak picture for Uchumi since both firms had 1.2b worth of stocks in 2004.

I don’t see a KMC (Kenya Meat Commission) style comeback for Uchumi – speaking of which I can’t wait for see KMC to start selling their very tasty corned beef again.