HomeNewsOK posts $10,3m after-tax profit

OK posts $10,3m after-tax profit

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Retail group OK Zimbabwe’s profit after tax more than doubled to $10,3 million for the full-year ended March 31 2012 compared with the previous year buoyed by a phenomenal growth in revenue.

The group declared a dividend of $0,35 bringing the aggregate dividend for the year to $0,5 after tax and its bottom-line climbed to $10 million from $4,2 million in the previous year.

Revenue for the Zimbabwe Stock Exchange-listed retailer rose to $412 563 027 from $257 426 323 recorded as the group opened two more shops to widen its inflows during the period under review.

The company announced its plans to roll out more shops countrywide in a bid to reclaim its market share in the highly competitive retail sector.
Net operating expenses increased by 38,7% to $27,6 million, but the ratio of total expenses to sales decreased to 13,3% from 14,8% in the previous year.

The retail group said the firm would continue to stock mainly imported products due to failure by the undercapitalised local manufacturing sector to meet local demand.

“The increase in net operating expenses was largely attributable to the increase in electricity tariffs as well as the cost of running larger generators during periods of power cuts,” said group chairperson David Lake in a statement accompanying results.

“The cost of borrowing increased to $500 000 compared to $100 000 during the same period in the prior year.

“Capital expenditure during the period was $11,5 million compared to $9,4 million in the previous year and was in respect of store refurbishments, the opening of two stores, replacement of plant and equipment and overhauling operations and distribution of vehicle fleet.”

During the period under review, the group accessed a $5 million convertible loan from shareholder Investec Africa Frontier Fund, to fund the ongoing refurbishment exercise.

“Disposable incomes are expected to remain low, but improving with the forecast growth in gross domestic product,” Lake said.

“The importation of products is expected to continue while local manufacturers battle to increase production.”

During the past year, the economy grew by 9,3% while year-on-year inflation stood at 4,9%.

“Prices were generally stable with minimal movement linked to rand/US dollar exchange rate fluctuation since South Africa remains the major source of imported products,” he added.

Meanwhile, the rand is currently on a freefall against the greenback, a development that could make local imports cheaper.

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