Pelhams Limited has trimmed its half-year post-taxation loss to $270 000 from $348 892 during the same period last year, but worries that operational costs remain high.
The review period closed on September 30.
The Zimbabwe Stock Exchange-listed firm is engaged in the manufacturing and retailing of household appliances and furniture equipment through four brands: Bradlows, Bannet and Harris, Furniture Discount and Pelhams – the group’s flagship.
Pelhams chairman Oliver Chidawu said rentals and utility bills weighed on earnings.
“High utility bills and high rentals continued to weigh heavily on the business as it struggled to break even,” said Chidawu.
“The growth of unit sales was not sufficient to improve the company’s profit position as margins had to be sacrificed due to the constrained demand and rising competition.”
Chidawu revenue increased by 91% to $2,7 million from $1,4 million same period last year after securing funding for restocking, while gross profit rose to $750 000 from $414 000 last year.
However, high operating costs pared margins to 28% from 29% the previous year.
Sales volumes for the period under review were 91% up to 4 200 units from 2 200 units last year same period, driven by a more stable local market and cheaper stocks from international markets.
The company’s manufacturing unit, Trade Winds, also slowly ramped up with limited manufacturing of lounge suites to augment supply.
In the outlook output is seen growing steadily.
Chidawu said the retailer also resorted to debt to fund the business.
“Additional funding for debtors’ securitisation programme has also been secured,” he said.
“The directors feel that this was the necessary first step to bring the company to a minimum break-even position going forward while laying the ground for securing long-term unencumbered funds in the new financial year.”
He said the initiatives would take the company to a break-even position in the second half with moderate profits on a monthly period.