OK Zimbabwe revenue surges, but expenses mount amidst COVID-19 impact

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  • Overheads grew by 680.6%
  • Revenue grew to ZWL8.7 billion from ZWL1.1 billion
  • Post 30 September 2020, the Group opened 2 more retail outlets

Harare – Ok Zimbabwe Limited saw its overheads spike rapidly during the six months ended 30 September 2020, reflective of the negative impact of the ongoing global coronavirus (COVID-19) pandemic, but posted sustained growth in revenues on a historical cost basis.

The publicly listed retail giant said overheads grew by 680.6% over prior year.

“The Group’s response to fight Covid-19 pandemic impacted overheads, particularly RDT and PCR tests, purchase of face masks, thermometers, hand sanitizers and staff passage costs. Contingent rentals, repairs and maintenance, bank charges and cleaning expenses also significantly contributed to increase in overheads,” the company’s Chairman Herbert Nkala said in a statement accompanying the financials.

The company enjoyed an 684% increase in revenue, which rose to ZWL8.7 billion during the period under review from ZWL1.1 billion in the comparative period. Profit before tax of ZWL 1.3 billion was 621% up on prior year’s ZWL 185 million, while profit after tax increased by 634% to ZWL 968.3 million from ZWL 131.9 million in prior year.

Mr Nkala said the Group will continue to work with supplier partners to ensure the stores are adequately stocked for the festive season and beyond, our value offering to customers will assist to recover volume sales.

Volume sales in 2020 have been largely impacted due to the COVID-19 induced lockdown restrictions which affected business through limited production, supply chain disruptions, logistical bottlenecks and reduced aggregate demand.

Capital expenditure for the half year was ZWL384.9 million, up from ZWL51.5 million for the same period in prior year largely incurred on store refurbishments and equipping new stores.

Post the reporting period, the Group opened a new OKmart store in Victoria Falls on 1 October 2020 and an OK Store in Harare’s Sanganayi Inn area on 5 November 2020.

According to Mr Nkala, the new stores were well received in the respective markets and are expected to contribute meaningfully to the Group’s revenue.

“The Group’s refurbishment programme will continue and eight stores have been targeted for completion by the end of the financial year,” he said.

Post the reporting period, the Group opened a new OKmart store in Victoria Falls on 1 October 2020 and an OK Store in Harare’s Sanganayi Inn area on 5 November 2020. The new stores were well received in the respective markets and are expected to contribute meaningfully to the Group’s revenue. The Group’s refurbishment programme will continue and eight stores have been targeted for completion by the end of the financial year

The Group is a leading supermarket retailer whose business covers three major categories, comprising groceries, basic clothing and textiles and houseware products. At the reporting date, the Group was operating from sixty-five shops countrywide and had two wholly owned subsidiaries.

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