OK Zim­babwe posts $2,3m profit

Chronicle (Zimbabwe) - - Business -

LISTED gi­ant re­tailer OK Zim­babwe posted an af­ter­tax-profit of $2,3 mil­lion for the half-year pe­riod to Septem­ber 30, 2016, an 87 per­cent rise from the $1,2 mil­lion recorded in the sim­i­lar pe­riod last year.

Man­age­ment at­trib­uted the im­prove­ment to lower costs at­tained dur­ing the pe­riod un­der review. The group recorded a 2,3 per­cent growth in rev­enue to $218,6 mil­lion.

Man­age­ment at­trib­uted the growth in rev­enue to a num­ber of fac­tors namely: a slow-down in de­fla­tion, growth in bas­ket size and ef­fec­tive pro­mo­tions for all of the group’s store brands.

And per­haps more sig­nif­i­cantly, the rise in rev­enue was also driven by the ad­just­ment cus­tomers have had to make to util­is­ing point of sales (POS) ma­chines. The use of POS ap­par­ently ben­e­fited for­mal re­tail­ers at the ex­pense of the in­for­mal play­ers.

POS pur­chases now ac­count for 80 per­cent of the group’s sales up from 70 per­cent pre­vi­ously. Earn­ings Be­fore In­ter­est, Taxes, De­pre­ci­a­tion, and Amor­ti­sa­tion (EBITDA) rose by 34,3 per­cent to $7,3 mil­lion while profit for the pe­riod in­creased to $2,3 mil­lion, an 87,1 per­cent gain from $1,2 mil­lion as the gi­ant re­tailer ben­e­fit­ted from ef­fi­cient pro­cure­ment.

At the same time, oper­at­ing costs were cut to $15,8 mil­lion from $16,5 mil­lion in the prior com­pa­ra­ble pe­riod.

Dur­ing the pe­riod un­der review, OK Zim’s over­heads dropped to $33 mil­lion from $34,2 mil­lion pre­vi­ously as group wide ini­tia­tives to con­tain costs con­tin­ued. Mean­while, man­age­ment has said cap­i­tal ex­pen­di­ture for the pe­riod was higher at $5,5 mil­lion, up from $3,9 mil­lion last year.

Ba­sic earn­ings per share was at 0,2 cents up from 0,11 cents prior year com­par­a­tive. The group opened two OK Mart out­lets dur­ing the pe­riod un­der review in Gweru and Victoria Falls, re­spec­tively.

And plans are afoot to open two more out­lets in Houghton Park, Harare and in Chipinge in the sec­ond half of the fi­nan­cial year. In terms of the out­look, man­age­ment said it will con­tinue with cost con­tain­ment ini­tia­tives to achieve prof­itable op­er­a­tions. — BH24

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