NATIONAL Tyre Services (NTS) reported an increase in profit after tax to $337 051 for the half year to September, but the company fears that fiscal and other monetary measures introduced by authorities will hurt its business going forward.
BY FIDELITY MHLANGA
In the previous comparable period, the company achieved an after tax profit of $171 851, which improved as a result of direct sourcing and a wider distribution network.
The company reported a 35% increase in revenue to $8 million, up from $6,5 million in 2017.
“The impact of the fiscal and other measures by the government in October 2018 are likely to have a significant impact on business in the second half of the financial year,” the company said in a statement accompanying financial results.
“We believe that the growth strategies implemented to date will strengthen the company’s ability to provide a modern customer experience, weather these challenges while growing market share and preserving value for stakeholders. These initiatives will include expansion, with particular emphasis on Harare.”
NTS noted that full implementation of new IT systems had made a positive effect on customer service and efficiency on retail and services, during the half year under review.
The tyre company added that the rebranding and refurbishment programmes which commenced towards the end of the period under review, were a refreshing change and convenience to customers.
“This was complemented by re-tooling and re-equipment initiatives at all branches, which will enhance capacity and services delivery,” NTS said.
The increase in profit-after-tax saw NTS’s basic earnings per share also nearly doubling to 0,13 cents from 0,07 in the comparative 2017 period.
Despite the increase in profit after tax, NTS only grew its total assets by 5,11% to $8,29 million from a 2017 comparative $7,88 million.
The company did not declare a dividend and directed funds towards refurbishment and recapitalisation.