BY MISHMA CHAKANYUKA
THE country’s largest retailer, OK Zimbabwe, reported an after tax increase in profits by 150% to ZWL$49,2 million in the year ended March 31, 2019 from ZWL$16,6m last year, but the firm warned of supply challenges citing a harsh operating environment.
“While the first half of the year was relatively stable, the operating environment became more challenging in the second half of the financial year. The fiscal and monetary policy pronouncements in October 2018 affected confidence in the market among holders of ZWL balances and bond notes and triggered panic buying of goods to retain value as well as to provide against expected shortages,” the company’s chairman Herbert Nkala said in a statement accompanying the retailer’s financial results.
“Shortages of foreign currency constrained replenishment and led to high prices of products”
Revenue grew by 37,6% to ZWL$801,9m from ZWL$582,9m in the prior year.
The group’s operating costs grew from ZWL$37,6 million to ZWL$49,2 million.
Nkala said the group operated free of debt as internally-generated funds were adequate for working capital and capital expenditure requirements.
Capital expenditure for the period was ZWL$25,8m up from ZWL$15,5m recorded in the comparative year as the group continued with its refurbishment exercise to improve existing facilities as well as expand its footprint.
During the period under review, the group opened a new branch in Glen View and an OK Mart in Masvingo.
“The refurbishment programme continued during the year, with OK Marondera, Bon Marche Chisipite, Bon Marche Borrowdale and OK Mart Harare being refurbished.
The emphasis was to increase capacity and facilities and improve customer experience,” Nkala said
He said going forward, the group would continue to focus on growing market share profitably.
“Product supply remains a challenge and strategic linkages with suppliers will be key to ensure the stores are reasonably stocked. Despite the economic challenges in the country, the group will continue to focus on growing market share profitably through continuously enhancing the customer value proposition,” he said.
“Refurbishment work will be carried out on a number of stores and new stores will be opened as strategic sites are identified where the group is presently inadequately represented.”