Furnmart mulls expansion
Furnmart has plans to open new stores, as the pandemic impact declines on the company’s operations, its annual financial report has revealed.
The annual report for the 12 months ended July 2022, indicates that the group opened two new Furnmart stores during the period under review and it continues to revamp old but profitable stores.
“Several new stores have been earmarked for opening in the new financial year,” said Furnmart Deputy Chairman, Tobias Mynhardt.
Mynhardt shared that the company has been wary to expand the store- base during the last two years.
However, the intention is to cautiously open new stores as opportunities arise.
The announcement comes on the backdrop of management expecting trading conditions to remain uncertain due to ongoing supply chain disruptions, high inflationary environment, and a slowing world economy.
On the just ended financial year, the company indicates that it reached revenue of P1.4 billion for the 12 months ended July 2022, a P19.5m higher than the prior year.
Mynhardt however, beamons that the sales growth, measured against the high comparable base of the prior year, has been sluggish.
“Sales growth recorded in the prior year was strong, after the lifting of the hard lockdown periods,” he said.
Mynhardt further said the total trade receivable impairment costs have increased significantly during the period under review, albeit off a low prior year base.
He highlighted that the increase in impairment cost must be seen in relation to the release of excess impairment provisions in the prior year that was increased after the hard lockdown periods.
“Management believes that the impairment provision is at an adequate level,” said Mynhardt. Meanwhile, Mynhardt said the company’s gross profit margins remain under pressure and have declined compared to the prior period.
“Some reprieve from the higher shipping costs and supply chain disruptions have started to filter through, but compared to the prior year, the inflationary impact of these disruptions is still prevalent.”