Harare – Clothing retailer, Edgars Stores Zimbabwe Limited said on Thursday its group net profit rose an impressive 569% to ZWL$8.7 in the year to 31 May 2019 from $1.3 million same period last year, while EBITDA increased by 524% to $16.3 million.
Although the Group highlighted a 16% decrease in unit sales, the increase in profits is highly a reflection of the surge in sales values, a trend across many sectors driven by high inflation.
Positive unit growth was recorded for the Jet chain at 6% and 10% for April and May respectively, while Edgars posted a 6% unit growth in May.
In a statement accompanying the financial report, Group managing director Linda Masterson said turnover was up 90% on last year with retail sales as at the end of May trading 90% above same period last year against inflation of 97%.
Masterson said sales at the Jet Kadoma store which was reopened in in April 2019 have shown positive signs while the search for the Edgars store in Kadoma is ongoing.
“Other revamps and new stores planned for this year, funds permitting, are Edgars Masvingo, Jet Masvingo and 2 to 3 new Jet stores,” Masterson said.
The Group’s finance income (LPC and debtors interest) has increased from $2.8 million last year to $3.4 million this year.
“Our debtors’ book is at its cleanest since dollarization, credit goes to our credit teams and our customers for their timely payments,” Masterson said.
“We continue to reap the benefits of enhanced controls from our ERP solution,” she added.
The retail business posted an operating profit of $14 million up from $3.8 million last year and a 365% growth in EBITDA attributed to cost control by the management team and cost inflation trailing behind top line inflation.
Meanwhile, the factory made a YTD profit of $1.5 million, 41% above last year with a unit growth of 12%, with 6% of the sales in export receipts.
“The team continues to focus on export growth,” Masterson said.
On the outlook, Masterson said the business is committed to delivering growth to shareholders and good product to customers while expressing positive expectations towards the recent monetary policy changes.
“We are positive that the change to the Zimbabwe Dollar will bring some stability,” Masterson said.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.