Mixed half year performance for Edgars amid economic challenges
Edgars Stores Limited, a leading retailer in Zimbabwe, has announced mixed financial results for the 26 weeks ended July 7, 2024.
Operating in a challenging economic environment, the company saw its volumes and revenues significantly drop but recorded improved profitability.
Total Group units sold declined by 22.4 percent from 1.09 million to 0.85 million compared to the same period last year.
As a result, revenue declined by 15.4 percent over the prior half year at US$16.1 million against US$19.0 million in 2023.
However, despite the drop in both revenue and units sold, profit before tax increased 169.6 percent over the half year to US$0.16 million compared to a loss of US$0.23million.
“The Group’s performance in the first half of the year is a testament to the resilience of our business model and the dedication of our team,” said Thembinkosi Sibanda, chairman of the Edgars Board.
“We are particularly pleased with the significant improvement in profitability, which reflects our focus on cost containment, margin enhancement and operational efficiency.”
A key driver of the improved performance, according to Sibanda, was the successful implementation of various strategies, including aggressive margin enhancement through optimised procurement, increased internal manufacturing and enhanced cost containment measures.
The company also focused on improving stock availability and quality, despite supply chain challenges.
The group’s financial performance was further bolstered by a reduction in finance costs, which declined by 52.4 percent to US$0.82 million. This was primarily due to lower interest rates and the shift to USD borrowings, which offered more favourable terms.
The retail segment, which includes Edgars and Jet stores, experienced a 12.8 percent decline in total retail merchandise revenue.
However, the company witnessed a significant shift towards ZWL credit sales, which now account for 93.1 percent of total ZWL sales. This trend reflects the growing preference for local currency transactions in the market.
Edgars Stores Limited continued to invest in its business, allocating funds towards growing the debtors’ book and expanding its store network. The company also actively participated in community initiatives, including the “Be a Hero” campaign, which donated school shoes and sports kits to Gumindoga Primary School.
The financial services segment, which includes the USD and ZWL retail debtors’ books, experienced growth during the period.
The USD retail debtors’ book increased by 25.3 percent, while the ZWL retail debtors’ book surged by 1154.3 percent. The company also focused on increasing the number of active USD accounts and maintaining strong asset quality.
Carousel Manufacturing, the Group’s manufacturing division, saw a significant increase in input volumes and turnover. The company invested in expanding production capacity to improve efficiency and meet growing demand.
“While the economic outlook remains uncertain, we are confident in our ability to navigate challenges and capitalise on opportunities,” said Sibanda. “We will continue to prioritise our customers, invest in our business, and deliver sustainable value to our shareholders.”-herald
