PROFIT-after-tax for OK Zimbabwe Limited increased by 87,1% during the six months ended September 30, 2016 due to the cost-cutting measures implemented by the group.
BY VICTORIA MTOMBA
In a statement accompanying the group’s results, OK Zimbabwe board chairperson David Lake said the company’s profit-after-tax stood at $2,3 million from $1,2m in the same period last year.
“Overheads decreased to $33m from $34,2m in the previous year as groupwide initiatives to contain costs continued. Controls over shrinkage were effective and will continue to be enhanced,” he said.
The group said capital expenditure for the period stood at $5,5m, up from $3,9m in the prior year in line with the performance of the group.
Revenue increased by 2,3 % to $218,6m from $213,6m.
The group plans to carry out partial refurbishment at OK Gwanda and OK Kwekwe before year-end to improve facilities, adding that larger stores would be opened in Harare and Chipinge during the second half of the year.
OK Herbert Chitepo in Bulawayo would be closed on November 30, 2016, as the group continues its rationalisation efforts to improve efficiency, it said.
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The group opened OK Gweru and OK Mart Victoria Falls.
It said the i-Tech store in Eastlea, Harare, did not perform to expectations as a standalone operation and was closed down on July 31, 2016. Stocks had to be moved to other stores.
It said the operating environment continued to be hampered by weak and declining macro-economic performance, which was characterised by low manufacturing productivity, thereby increasing unemployment, depressed consumer spending and limited access to cash.
“In the period, the group recorded an increase in both revenue and profitability. Gross margins improved due to efficient procurement, while operating costs were managed down to achieve improved profitability. Working capital has improved significantly, reflecting sufficient liquidity in the business to meet the group’s operating requirements.”
The group said despite the import restrictions that impacted on the supply of products, it managed to secure supply of goods for the period under review.
