Home Afrika, a Nairobi Securities Exchange listed property developer has a 90 per cent drop in profit for the financial year 2014. The firm’s profits dropped from Sh. 80 million to just Sh. 9 million. Attributing the sharp fall to its failed bond offer of Sh. 0.9 billion, Home Afrika said that its revenue grew by 6 per cent to Sh. 687 million

The bond flop saw Home Afrika turn to bankers taking a loan of Sh500 million, leading to delay in funding projects that would have propped up its earnings in the period.

“Home Afrika had embarked on raising finance through debt issue since early 2014, the proceeds of which were only realised in late December 2014 and early 2015,” Home Afrika said in a statement to investors.

“As a consequence, the investment of such funds in the infrastructure development at the underlying projects of the group has been delayed which is the primary reason for the net profit achieved in 2014.”

The Migaa housing project in Kiambu was to be the main beneficiary of the bond cash while other funds were to go to the Llango Development in Kwale and Lakeview housing project in Kisumu.

The company’s assets grew 19.3 per cent to Sh3.7 billion from the previous year’s Sh3.1 billion, mainly on account of improved valuation of properties. Home Afrika’s earnings were dragged down further by administrative expenses which stood at Sh213.1 million as well as costs of sales which grew by 71 per cent to Sh447 million.

Directors of Home Afrika did not recommend a dividend payout. “The group anticipates continued utilisation of the proceeds from the Sh500 million debt issue in project development over the first half of 2015 with resultant benefits in the form of revenue and profits to be generated in the second half of 2015,” Home Afrika said.