Bumper harvest excites OK Zimbabwe

RETAIL giant, OK Zimbabwe, has invested in capacity improvement as it hopes for the anticipated economic rebound largely driven by the good agricultural season and the prevailing stable macro-economic environment.

The good rain season has given Zimbabwe a huge boost of a bumper harvest, which is expected to stimulate consumer disposable income and help trim food imports.

A recent Second Round Crop and livestock Assessment Report for 2020/2021 season already shows the estimated maize production stands at 2, 7 million tonnes, which is 199 percent of the 907 528 tonnes produced in the 2019/2020 season.

Traditional grains production for the 2020/2021 season is estimated at 347 968 tonnes, which is 128 percent more compared to 152 515 tonnes in the 2019/2020 season.

This is a good indicator of positive growth, said OK Zimbabwe in a statement accompanying financial results for the full-year ended March 31, 2021.

The retail chain said the resumption of its OK Grand Challenge promotion, which was last year suspended due to Covid-19 induced lockdown, is expected to underpin volume growth in the first quarter of the firm’s financial year.

“The economy is expected to benefit from the anticipated good harvest from the 2020/2021 agricultural season, availability of foreign currency on the auction system and declining inflation,” said OK.

“The group has been investing in capacity enhancement and is therefore well poised to maximise on the anticipated economic rebound.”

The retail chain said it will continue to pursue more innovative initiatives to grow its market share. The refurbishment and expansion drive will be reinforced and a number of stores are targeted for refurbishment and new sites are under consideration.

During the year under review, the group’s capital expenditure programme continued and refurbishments were completed at OK Avonlea, OK Machipisa, Bon Marché Belgravia, Bon Marché Eastlea (Harare), OK Kadoma, OK Rusape and OK Hwange.

Two new stores were opened in Harare’s Sanganayi Inn area and an OK Mart store in Victoria Falls.

Capital expenditure for the year under review was $1,2 billion down from $1,5 billion in the prior financial year.

Most of the capital expenditure was on refurbishment and equipping of the new stores.

“The refurbished stores and new branches were well received in their respective markets and made a significant contribution to the group’s sales.

“The group embarked on a brand repositioning exercise for all its store brands, namely OK, Bon Marché and OK Mart to meet emerging customer requirements and market trends,” it said.

In terms of the group’s performance, revenue for the year declined by two percent to $34,3 billion from $35 billion in the prior financial year.

A profit before tax of $2 billion was 42 percent below prior year of $3,4 billion, while profit after tax declined by 46 percent to $1,1 billion from $2 billion in prior year.

“Overheads grew by six percent over prior year. The measures implemented by the group to curtail the spread of Covid-19 increased the cost base.

“Electricity charges, staff costs, cleaning costs and security expenses also contributed to overheads growth,” said the retail group.

Capital expenditure for the year was $1,2 billion down from $1,5 billion in prior year. During the year under review, the company declared a final dividend of $0,54 per share to be paid to shareholders on or about the 1st of July 2021.

The final dividend brings the total dividend declared for the year to $0,80 per share. On Covid-19 pandemic, OK Zimbabwe said the disease had a strong impact on its customers, the business and supply chain.

“As such we took precautionary measures to protect our customers and stakeholders while ensuring business operations are safe from Covid-19 exposure,” said OK. —chronicle.c.zw