OK profit jumps 800 percent:

LISTED retail giant, OK Zimbabwe reported a near nine-fold jump in net profit to $6,1 million for the year ended March 2017 compared to the previous year on the back of higher sales and improved cost management.

In the year ago period, OK Zimbabwe’s performance fell after a decline in sales and lower gross margins hurt profits.

Revenue for the retail group during the period under review was up eight percent to $472,4 million.

Operating profit was $8,6 million from $1,3 million while the group reported attributable income at $6,1 million in the year to March from $700 000, an 8.7-fold increase.

Chief executive Alex Siyavora said the group had tilted its product offering towards higher margin products and also benefited from revenue generated by its in-store banking facilities.

He said contribution of the group’s own brands to sales is yet to grow and also highlighted that local supply is still facing challenges.

Earnings Before Income Tax, Depreciation and Amortisation (EBITDA) for the group was up 84 percent at $16,6 million with headline earnings per share) increasing to 0,52 cents.

Mr Siyavora said the retail group’s partnership with Kawena of South Africa will assist with procurement of finished goods for resale and capital equipment.

“The group’s focus will be on improving its market share position through more efficient use of existing capacity, rolling out own bakeries, increase growth in fruit and vegetables as well as butcheries,” said Mr Siyavora.

Mr Siyavora said in spite of the implementation of Statutory Instrument 64 of 2016 which restricted import of goods which most local manufacturers were producing, the retailer received “adequate import permits” in cases where products were not locally available.

“As a result, our stores were adequately stocked with a mix of local goods and products imported from South Africa, Botswana and Zambia,” Mr Siyavora said.

Former retailers are also facing stiff competition from “street shops” where vendors are selling basic goods at cheaper prices.

Experts, however, say retail chains slight advantage at the moment is their ability to allow customers to pay using a number of methods unlike vendors who mostly want cash which is in short supply.

In the period, OK Zimbabwe spent $11 million in capital expenditure, up from $4.4 million the year before.

New stores were also opened in Gweru, Norton and Victoria Falls.