Edgars profit up 235pc

HARARE - Edgars Stores Zimbabwe (Edgars) yesterday announced a 235 percent increase in profit after tax for the six months ended July 8, 2018, driven by sales growth.

The company reported a profit after tax of $1,9 million, representing a significant increase from a profit of $567 499 reported for the comparable period in 2017.

Themba Sibanda, Edgars board chairperson said the performance improvements were in spite of a challenging environment. 

“Despite the challenging environment of foreign currency shortages and the threat this has on margins and merchandise assortments, the group’s sales of merchandise has grown from $24,1 million  in the half year to June 2017 to $31,1 million  in the same period in 2018, an increase of 29 percent,” the chairperson said in a statement accompanying the company’s financial statements.

The Edgars chain’s total sales were $19,5 million up from $15,8 million in 2017, while sales per square metre were $1 958, up from $1 502.

“The Jason Moyo branch in Bulawayo is currently being revamped and the Masvingo branch is set for a revamp in the second half of the year,” Sibanda said.

The Jet chain’s total sales were $12 million up from $8,7 million in 2017 as sales per square metre were $2 966, from $2 103 in 2017.

“The Marondera branch was revamped during the period under review and the Masvingo branch is planned for a revamp in the second half of the year,” said Sibanda.

Edgars chain debtors were $16,8 million, while Jet’s debtors were at $4,9 million. The Edgars chain’s net write-offs for the period averaged 2,1 percent from 8,7 percent in 2017. The Jet chain’s net write-offs for the period equated to 1,6 percent, from 6,6 percent.

The company’s factory made a loss of $0,3 million after a once- off payment for terminal benefits amounting of $0,2 million.

“We believe the reduced cost structure will align with the export initiatives being pursued,” the chairperson said.

Meanwhile, the company’s new Microfinance division grew from a loan book of $0,6 million at December 2017 to $2,6 million at June 2018.

Total revenue of $0,5 million has been earned for the six months. The division made a profit before tax of $62 000 after $88 000 allowance for credit losses.

“We are well poised to take advantage of any upswing in economic activity and should achieve original forecasts by year end,” Sibanda said.

— The Financial Gazette

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