OK Zimbabwe posts $2,3m profit
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