HomeBusinessOK Zimbabwe profits jump 800%

OK Zimbabwe profits jump 800%

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OK Zimbabwe’s profit after tax grew by 800,9% to $6,1 million from $700 000 in 2016 due to improved customer service, product mix, efficiencies, margins and better management of cost.

BY TARISAI MANDIZHA

Revenue grew by 8% to $472,4 million from $437,5 million in the prior year.

Speaking at the company’s analysts’ briefing in Harare on Tuesday, OK Zimbabwe Limited chief executive officer, Alex Siyavora, said manufacturing of local products improved the supply situation in the country against a background of shortages of foreign currency.

“Despite the difficult operating environment, the group delivered a significantly improved performance. This was a result of sharpened focus on customer service and product mix improved back office efficiencies, improved margins and better management of costs as a result of initiatives rolled out in the prior year,” he said.

Siyavora said in spite of the introduction of Statutory Instrument 64, which banned imports of products with local equivalents, they had received adequate import permits issued for goods that were not available locally, as a result their stores were adequately stocked with a mix of local goods and imports from South Africa, Botswana and Zambia.

He said in support of initiatives to resuscitate local industry, the group continued to support the Buy Zimbabwe campaign.

In the period under review, overheads remained at the same level as the prior year, as the group continued to enforce measures to contain costs.

Siyavora said the group further reduced its costs of borrowing from $300 000 to $100 000.

Capital expenditure for the year was $10,9 million up from $4,4 million in the prior year as the group continued its refurbishment exercise to improve existing facilities.

“The forecast, the economy is expected to grow by 3,7% and International Monitory Fund forecast growth of 2%, we expect to benefit from part of the growth,” Siyavora said.

“The retail sector will remain competitive and we intend to sustain and raise our game.”

During the period under review, OK First Street, OK Kwekwe and OK Gwanda stores were refurbished, while OK Chipinge and OK Houghton Park stores moved to bigger sites.

“The group continued to expand its foot print countrywide. Three new stores were opened during the financial year and these are OKMart Gweru, OKMart Victoria Falls and OK Norton,” Siyavora said.

“OK Herbert Chitepo and Bon Marche Parklands, both Bulawayo, were closed on November 12, 2016 and March 31, 2017, respectively, as the group continues to rationalise its operations to improve efficiencies.”

He said the group will refurbish six stores this year and will open a new store in Harare in the next two months.

Siyavora, however, said the retail sector remains competitive and the group expects to continue growing sales, manage overhead costs and further improve profitability.

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