INNSCOR Africa Limited’s profit after tax increased by 23% to $15,9 million in the half year ended December 31, 2015 from the previous year attributed to a growth in volume, efficient cost of sales and operating cost management.
BY TARISAI MANDIZHA
In the comparable period in 2014, profit after tax was $12,9 million.
Revenue grew by 2% to $301 million as compared to $296 million in 2014.
In a statement accompanying the reviewed financial results, board chairman Addington Chinake said the group results were characterised by growth in volumes in all light manufacturing business which, however, were partially offset by the reduction in the average revenues per unit as Innscor made a decision to reduce prices to assist the customer in the difficult economic environment.
“On a continuing basis the group businesses delivered a 2% growth in revenue, an 8% increase in operating profit, an 18% increase in profit before tax and a 23% increase in profit after tax.
“Good growth in volumes driven by reduction in price to the customer, resulted in improved capacity utilisation and improved efficiencies operating expenses were also tightly managed resulting in decrease in costs compared to prior year. The volume growth, efficient cost of sales and operating cost management made a positive contribution to the group’s profit before tax and the 23% increase in profit after tax,” Chinake said.
Chinake said the operating profit of the group’s discontinuing businesses however declined by 50% which was severely distorted by the once-off effects of the disposal and closure of SPAR retail and SPAR DC respectively.
He said at segment level specialty retail and distribution was 1% up in operating profit on a like for like basis.
During the period under review the group capital expenditure on all businesses was reduced to $16,39 million from $17,41 million in 2015.
Net borrowings increased by $13,04 million to support capital expenditure, working capital investment in strategic inventory and the acquisition of Transerv resulting in net gearing of 17,21%, Innscor said.