NATIONAL Tyre Services (NTS) has recorded a decline in units of new tyres during the year ended September 20 2014 due to the decline in consumer demand.
In a statement accompanying the group’s results, NTS said the liquidity constraints, declining disposable incomes, widespread company failures and increasing unemployment were characteristic of a deteriorating economic environment that was a major constraint to trade in the period under review.
“Units of new tyres declined marginally compared to prior year in line with the diminishing buying power of consumers and the migration towards lower priced products. Unit of sales of retreads retreated compared to the same period in prior year for the same reasons as above. In addition, this segment was affected by the declining gap between premium retreads and bottom tier truck tyres,” the group said.
During the period under review the group posted a decline in profit to $32 077 from $351 069 same period last year. While revenue was 11% down compared to the same period last year to $7,5 million due to pricing adjustments by the company and some of its suppliers which were meant to stimulate demand.
Service grew in response to expanding service offering and the tyres on-the-go distribution channel contributed to volumes and revenue and is expected to continue growing.
Overheads declined by 5% due to productivity enhancement combined with strategic cost management.
Earnings per share for the group were down 91% to 0,01 cents from 0,14 cents same period last year.
“Earning reflect the combined, effect of declining sales and margins. Cash generated from operations reflects the objective of ensuring the availability of product across all the company’s distribution channels,” the group said.