OK Zimbabwe says this year’s OK Grand Challenge Jackpot Promotion’s (OGCJP) contribution to the company’s revenue might have been higher had it not been for forex shortages to import finished goods, despite a 20% growth in revenue.
In the company’s trading update covering the past three months announced at OK Zimbabwe’s annual general meeting (AGM) in Harare last week, OK Zimbabwe chief executive officer Alex Siyavora said forex challenges caused an erratic supply of goods.
BY TATIRA ZWINOIRA
“We experienced erratic supply of some goods in the last three months, but the supply situation is improving and we expect to meet our sales targets for the next quarter (July to September),” he said.
“Revenue growth was 20% and it is growing ahead of increases in operating costs and that is good for profitability. Gross margins have also been maintained.”
Siyavora told NewsDay after the meeting that the erratic supply was on finished goods.
“When we get permits to import, then you fail to get the currency (forex) in time, it delays the arrival of the goods. You eventually get it but it is over a long period of lead time and with your suppliers the same happens to them, they fail to get currency in time for them to import and deliver…” Siyavora said.
“…So, we also felt the supply pipeline had slowed down to the point where some of goods were not even on the shelves, you know a week or two weeks at the time and that was at a time where we were running our promotion so the potential obviously gets limited.”
In the company’s full year report ended March 31, 2018 OK Zimbabwe chairman David Lake said that in the 2018 financial year, intermittent shortages were experienced on some goods towards the end of the year.
Now, with the trading update, these shortages seemed to have continued into the first quarter of the 2019 OK Zimbabwe financial year during which the OGCJP ran from April 12 to June 1.
Thus, the contribution from the OK Grand Challenge was affected due to missing some products from forex shortages to import them.
However, despite the potential lower than expected contribution of the OGCJP to the overall revenue of OK Zimbabwe during the past three months, Siyavora said they still got a “meaningful” contribution and the company expected growth going forward.
“Performance is ahead of budget, with positive growth over the prior year. Our promotions, the major one being the OK Grand Challenge Jackpot Promotion, were successful and contributed meaningfully to the quarter’s performance,” he said.