OK targets regional markets

HARARE - Zimbabwe Stock Exchange-listed retailer OK Zimbabwe Limited (OK) said it will soon be expanding operations into the region as a way of boosting earnings and consolidating its foothold on the African continent.

Willard Zireva, OK chief executive told analysts at the company’s full year results  briefing that the retail giant has set its eyes on setting up a thriving business venture in the region.

“We are looking at funding our regional expansion initiatives from a combination of internally generated funds or borrowing locally,” he said without divulging the identity of the potential markets.

OK’s revenue in the full year to March 31 grew by 16,3 percent to $479, 6 million from $412,6 million in prior year.

Profit before tax stood at $16,9 million from $15 million while profit after tax grew by 20,1 percent to $12,4 million from $10,3 million.

Overheads increased by 19,2 percent to $65,2 million from $54,7 million in the previous year.

“The increase in overheads was mainly a result of increases in employees benefits as more employees were engaged to man both the new branch opened during the year and the refurbishment of branches in order to provide adequate service in the improved facilities with broadened product offering,” said Zireva.

Capital expenditure was $12, 1 million, up from $11, 5 million in the prior year mainly as a result of store refurbishments and replacement of plant and equipment.

The cost of borrowing increased from $400 000 in prior year to $800 000 in the period under review while a $5 million convertible loan from Investec Africa Frontier Private Equity Fund (IAFPEF) translated to about seven percent shareholding in OK.

Zireva said that after obtaining a money transfer licence there has been positive development as the company continues to expand financial services products to improve this line of business.

“We are still building up in this line of business. I can confirm that for the first four months up to May the money transfer services contributed over $80 000, our target is to make it to a least $1 million,” said Zireva.

The group said imports continued to dominate products sold in their stores as local manufacturing remained depressed.

Going forward, the retailer said that despite diminishing disposable incomes they would continue competing fiercely through experience and building strong brands.

A final dividend of 40 cents per share was declared in the period under review, bringing the total dividend for the year to 60 cents a share, an increase of 20 percent over prior year. - Kudzai Chawafambira

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