HomeBusinessEdgars profit up on resurgent consumer spend

Edgars profit up on resurgent consumer spend

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EDGARS Stores Limited has recorded an after tax profit of $567 499 for the 26 weeks ended July 9, 2017 from $109 119 in the same period last year, driven by good merchandise assortments and resurgent consumer spend.

BY TARISAI MANDIZHA

In the period under review, revenue grew by 7% to $24,675 million from $23,103 million in 2016.

In a statement accompanying the group’s unaudited abridged results, Edgars Stores Limited chairperson Themba Sibanda said the enterprise resources planning solution has enhanced controls over credit policies, this together with improved debt collection and policy changes in credit management has resulted in savings of $1,5 million on last year.

“We anticipate savings of at least half this amount in the second half of the year. Other operating expenditure increased due to post go-live ERP continuing support. Other significant cost increase includes factory costs and electronic payment commission,” Sibanda said.

The group’s profit before tax for the six months was $0,9 million from a loss position of $0,3 million in 2016.

In the period under review, Edgars Chain’s total sales for the half year were $15,2 million from $14,5 million.

Comparable half year sales grew by 5,7% per square metre were $685 from $648 in 2016 and the chain’s profitability increased by 6% to 27% in the period under review.

The Edgars chain traded from 27 stores down from 28 in the comparable period in 2016.

Jet Chain total sales for the half year were $8,7 million from $7,7 million in the same period in 2016.

“We will continue to improve store environment. We have recently completed the refurbishments of Edgars Stanley House in Harare CBD and the conversion of Edgars Rusape to a Jet store is in progress. Our microfinance business, Club Plus Private Limited has commenced trading albeit with caution. The business will focus on short term consumer loans,” Sibanda said.

He said the prevailing foreign currency shortages would impact on the group’s product range particularly for fourth quarter.

‘We will pursue all options to obtain key imported products for our customers and inputs for the factory, while actively implementing import substitution where feasible. Cost containment and preservation of profitability continues to be foremost in our minds,” Sibanda said.

He said the biggest obstacle to import substitution was the limited allocation of foreign currency to local suppliers for fabric and trim imports.

“Given the gravity and intensity of the unfolding cash shortages and foreign currency scarcity, management is working tirelessly to avoid an inadequately stocked fourth quarter. Provided we succeed, management is confident that the business will meet the 2017 profit forecast,” Sibanda said.

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