Powerspeed declares $500 000 dividend

HARARE - Powerspeed Electrical (Powerspeed) has declared a dividend for the first time in over a decade worth over $500 000.

The company — which declared a dividend of 0,4 cents per share for the year ended September 30, 2018 — recorded a $4,2 million profit, which was 285 percent profit surge from $1 million recorded prior comparable period.

In addition, the Zimbabwe Stock Exchange-listed electrical firm also allotted about 6,58 million in new shares.

Powerspeed chairperson Simba Makoni, yesterday, said the company’s turnover was up 53,2 percent from $22,1 million 2017 to $82,5 million last year.

However, borrowings in the year under review remained high with the firm forced to hold additional inventory. Inventory was up from $14,6 million to $19,6 million.

Throughput was down in the last two months of the period under review because of economic uncertainty.

“Unfortunately, we have seen a reduction in throughput in the last two months because the economic uncertainty has been exacerbated by significant upward pressure on expenses as suppliers and service providers attempt to preserve or regain value lost as a result of the exchange differential between the Real Time Gross Settlement dollar and the United States dollar,” Makoni said.

This comes as the ZSE counter’s profit after tax for the half year to March 31, 2018 surged to $2 million from $581 000 prior comparable period buoyed by an increase in throughput.

The group said its turnover for the half year, at $37,2 million, was 55,3 percent up on the previous period, with the company lifting its gross margin slightly, from 26,3 percent to 28,1 percent, mainly through improved sourcing.

“Operating expenses grew by 37,6 percent, to $7,4 million, driven by the branch expansion programme. The net result of which was a 180 percent increase in operating profit, from $1,19 million to $3,32 million,” the firm said in a set of published financials for the half year.

Borrowings was also a significant problem in the first half as well, at $9,9 million, as a result, finance costs increased by 39,6 percent, to $566 000.

“However, given our recent investments in property and in inventory to feed the growth in throughput, we believe that this level of borrowings is less concerning than in previous years.

“Attributable profit after tax came in at just over $2 million, significantly up from the $581 000 reported for the corresponding period last year,” Powerspeed said.

Despite the poor performance of the Zimbabwe economy, generally leaving consumers with very limited disposable incomes, Powerspeed said it was encouraged by the substantial growth in throughput that our business has achieved.

“During the period under review, we have seen an increase in throughput, which has resulted in an improved contribution from the division.

“The improved levels of business optimism and activity, particularly in mining, are steadily improving demand.

“As a result, throughput and profitability in the operation, grew from $888 000, to $1,4 million, and $52 000, to $216 000, respectively,” the listed concern said.

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