In the year ended December, the Nairobi Securities Exchange (NSE)-listed firm recorded a net loss of Sh17.8 million while the minority partners took a net profit of Sh26.8 million.
“The current model is a 60-40 split between ourselves and the equity partners in the subsidiaries,” said Home Afrika CEO Njoroge Ng’ang’a. “Going forward, we will seek to own projects 100 per cent.”
Home Afrika, through its subsidiaries, has teamed up with equity investors to develop various real estate projects, including Migaa in Kiambu. This has left it with non-controlling interests who have taken a larger share of profits despite their smaller stake of about 40 per cent, according to the company’s reports.
In the six years ended 2014, the non-controlling investors took a cumulative net profit of Sh93.3 million as shareholders of Home Afrika booked a net loss of Sh126.4 million in the same period.
Most publicly traded firms have allotted a smaller share of their net profits to minority interests, making Home Afrika’s larger payouts to the non-controlling investors a rare phenomenon.
Shareholders of TPS Eastern Africa, for instance, took Sh245.9 million out of the total Sh274.4 million net profit the hotel chains operator made in the year ended December.
This left Sh28.5 million to the non-controlling interests. “Our equity structure is unique compared to other NSE firms,” he said, noting that this would be remedied by full ownership of future projects.