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OK Zimbabwe profits up

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RETAIL giant OK Zimbabwe’s profit after tax jumped 25,8% to $4,86 million in the six months to September 30 despite a slowdown in economic activity.

Acting Business Editor

Revenue generated during the period rose 24,6% to $231 million.

Sales growth at 24,5% was ahead of inflation of 3,2% attributed to improved facilities and offering, the return of customers from the informal market and dying competition.

Capital expenditure of $7,35 million compared to $6,96 million the prior year was largely used for store refurbishment, plant and equipment replacement.

Operating expenses increased to $32,75 million from $26,7 million during the same period last year.

“The increase in overheads was partly caused by increases in employee benefits as more employees were engaged to man the two new stores opened in the latter part of the prior financial year as well as in the refurbished branches in order to provide adequate service in the increased facilities,” company chairman David Lake said in a statement accompanying the interim results.

Blake indicated that OK Zimbabwe would soon begin offering money transfer services and had since acquired the necessary paper work.
“The company obtained a money transfer licence and work in this area is expected to contribute to earnings in the last quarter of the financial year,” he said.

The company said direct sourcing mainly from Asia was being used to supply high quality and more competitively priced and unique hi-tech and general merchandise products particularly for OK Mart as well as some OK & Bon Marche stores.

The retail chain noted that the middle class was still small, while market salaries had remained relatively low thereby affecting consumer spending.

It said the high level of imports had made the central warehousing and distribution centre a key component of the supply chain in store network.

Blake added that OK Zimbabwe had invested in a distribution fleet and facilities handling both dry and perishable products in order to ensure adequate internal capacity for distribution.

A new store is planned for Hwange in the last quarter of the year in addition to refurbishments at Lobengula, Chinhoyi and Kadoma stores.

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