Harare – Listed electrical retail and engineering concern Powerspeed’s profit for the year ended September 30, 2018 surged 285 percent to close at $4.2 million compared to $1.1 million last year buoyed by expansion of footprint and product offering.
Turnover for the year rose by 53.2 percent to close at $82.5 million compared to $54.0 million in 2017, while gross margins rose 66.2 percent from $13.3 million to $22.1 million.
Managing Director, Hilton Macklin presenting the Group’s financials in the capital Tuesday said the key strategy for the year, was growth in sales volume, with a resultant improvement in their purchasing power.
He said to mitigate the impact of erratic supply lines, the Group increased inventory.
“Although increased inventory meant high levels of borrowings, it also meant good growth in income, market share and more importantly profitability.”
Macklin said as a result of the significantly increased retail area and throughput, as well as inflationary pressures, operating expenses increased by 34 percent from $11.5 million to $15.4 million and this resulted in EBIT of almost 200 percent from $2.31 million to $6.80 million.
In the period under review, finance costs rose marginally, from $0.85 million to $1.2 million, resulting in profit before tax of $5.68 million compared to $1.46 million for the previous year.
Income attributable to shareholders came in at $4.2 million, significantly up from $1.09 million, for the last financial year.
Macklin said during the year the Group purchased premises which house their Pomona as well as Chiredzi branches.
“There was significant increase in inventory from $14.6 million to $19.6 million. Although some of this increase may be attributed to inflationary cost adjustments, the bulk of it was intentional increases, to support the increased sales volumes. Despite the increase in inventory, and the purchase of the two properties, we were able to reduce our borrowings marginally from $9.5 million to $8.6 million, with the long-term portion of these increasing from $1.7 million to $2.1 million,” he said.
The Group managed to declare a dividend for the first time in over a decade of 0.4 cents per share.
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