INNSCOR Africa Limited is disposing its interest in the six Spar Corporate stores in Zimbabwe, as it moves away from non-core business interests, the Zimbabwe Stock Exchange-listed company has said.
BY TARISAI MANDIZHA
In a notice to shareholders yesterday, company secretary, Andrew Lorimer said the disposal of the group’s interest was necessitated by the need to focus on core business.
“Pursuant to Innscor Africa Limited strategy of focusing on core business, the board of directors announces that the group has, with effect from January 1, 2016, divested its interest in the six Spar Corporate stores which it operated in Zimbabwe,” he said.
Lorimer said the total revenue and total assets contributed by Spar Corporate Stores to the overall group for the year ended June 30, 2015, was $52,8 million and
$14,6 million respectively.
Lorimer said further details regarding the transaction would be made available in the group’s upcoming statement of interim financial results to December 31, 2015.
According to Innscor Africa Limited’s 2015 annual report, the group chairperson, Addington Chinake, said Spar had continued the extensive restructuring and re-alignment of operations at the corporate stores, resulting in a turn-around in trading profit despite recording a 17,72% decline in revenue as a result of store closures.
Chinake said as part of this restructuring, the business closed the non-performing Borrowdale Brooke store, made changes to the executive team during the year, and also acquired a store at Queensdale shopping centre.
“The restructuring efforts have seen operating expenses dropping by 29,31% on prior year. Management continues to focus on improving efficiencies in the supply chain to improve margins and further reduce costs. Much progress has been achieved in this regard but further work remains to be done to restore the business to profitability at profit before tax,” he said.
Chinake said the Spar distribution centre outsourced its warehousing and distribution functions to a group-shared warehouse facility with the aim of improving efficiencies.
He said as with Spar retail stores, the business underwent restructuring, resulting in a turnaround at a trading profit level, following a 41% drop in operating expense and margin improvement and further cost reduction and margin improvement initiatives continue to be implemented.