This archive report was first published on 1 August 2019.
Published on August 1, 2019, Home Afrika's financial woes have deepened, with the company posting a loss of Sh346 million for the year ended December 31, 2018.
The real estate developer's financial statements revealed a 59% decline in revenues, from Sh263 million in 2017 to Sh109 million in 2018, pushing the firm further into the red.
According to the company's note accompanying the financial results, the slowed growth in the real estate sector, constrained credit access, and a general slowdown in spending power among plot and house buyers contributed to the dismal returns.
Home Afrika's financial struggles are not new, with the company posting dismal returns for the third consecutive year. In 2017, the company reported a 55% increase in losses, and in 2013, it became the first to list at the Growth and Enterprise Market Segment (GEMS) at the introductory price of Sh12, valuing the company at over Sh10 billion.
However, the company's share price has dropped to Sh0.6 as of the close of trading, eroding more than Sh4 billion of the company's value. The external auditors, PKF Kenya, have given a disclaimer opinion due to Home Afrika's failure to fully open its books to scrutiny.
PKF Kenya stated, "PKF Kenya as the external auditors have issued a disclaimer of opinion audit report on the financial statements on the basis of their inability to obtain sufficient appropriate audit evidence in respect of going concern and impairment of inventory."
Home Afrika's financial struggles have significant implications for the company's future prospects and the real estate market as a whole.
