EDGARS Stores Limited has recorded a decline in after-tax profit to $1,045 million for the 26 weeks ended July 5 2014 as compared to $1,097 million due to rising expenses.
In the period under review, revenue grew to $29, 5 million from $28, 7 million in 2013.
In a statement accompanying the group unaudited interim results for the 26 weeks ended July 5 2014, Edgars chairperson Themba Sibanda said through strategic initiatives such as re-launching The Club and offering extended payment terms to Edgars chain customers in the form of a 12-month to pay account, the group managed to recover from the weak first quarter performance which was a direct consequence of the ongoing tough liquidity environment.
Sibanda said in the Edgars chain’s new stores were opened in Victoria Falls and downtown in Harare, bringing the total of Edgars branches to 28 from 24 branches in 2013.
During the period under review, the chain’s turnover increased by 7,4% while profit declined by 9,7%.
“July trading was strong and cost control efforts started bearing fruit resulting in improved profitability. 89,9% of the chain’s sales in the first half were credit sales from 89,4% in 2013, and stock cover was 11,7 weeks from 11,6 weeks,” Sibanda said.
He said the Jet chain contributed 18,8% to the group’s turnover from 18,2% in 2013. Total turnover for the 25 stores was 12, 3% above last year.
“July trading was more buoyant and both profitability and old store growth rates improved. The chain has been seriously affected by price–based competition from the informal sector and unbalanced assortments arising from rapid expansion last year.
“Concerted efforts to improve pricing and product assortment are underway and we expect a turnaround for the chain in the last quarter,” Sibanda said.
He however said closing stock cover was 12 weeks, which was a solid improvement from the 16,7 weeks last year.
Sibanda said on credit management, combined debtors book had 203 728 from 188 477 in 2013, accounts at the end of June of which 71,3% were active as compared to 72,5% in 2013.
During the period under review, provision for doubtful debt of $517 020 represents 2,3% of gross balances. Average handovers for the period amounted to 0,4% of lagged debtors and 1,6% of lagged credit sales.
He said recoveries from handover averaged 34,6% of debt handed over.
Sibanda said the factory continues to improve its performances, having contributed $264 148 to the group’s profit before interest and tax.
Production volumes increased to 170 197 units, an increase of 35% from 126 221 units in the first half of 2013.
“We are committed to supporting the local clothing manufacturing industry and will continue to retool this business unit to improve productivity and enable it to compete regionally,” he said.