Zimbabwe Stock Exchange (ZSE) -listed clothing retailer, Edgars Stores Limited has emerged from a loss position to post ZWL 558.9 million profit for the year ended 9 January 2021 from a loss of ZWL 322 million recorded in 2021, a year infested with COVID-19 restrictions. 

The profit position came despite a volatile economic environment which was bounded by exchange rate volatility and inflationary pressures that eroded the customer purchasing power and disrupted credit sales.

“Throughout the financial reporting period of 2021, the operating environment remained volatile and the Group continued to trade under challenging socio-economic conditions and effects of various regulatory pronouncements,” the Group said in a statement accompanying the full-year 2021 financials. 

“Although relatively stable over the reporting period under review, inflation and exchange rate movements continue to have a significant impact on the Group’s operations which increased operating costs with occupancy, employment, intermediated transaction tax and fuel costs being some of the significant costs that continue to rise.”

Trading profit and operating profit also overturned prior year losses, growing by 407% and 207% to ZWL 2.9 billion and ZWL 1.2 billion respectively. This resulted in revenue soaring by 83% to ZWL 5.9 billion from ZWL 3.8 billion in the full year 2020. 

Total Group units sold increased by 4.1% from 2.4million to 2.5million compared to the same period in 2020 while 2021 saw the manufacturing concern, Carousel, recording its first export sale to Botswana which the Group said was a testament to management’s initiatives to continuously explore alternative markets.

“Trading in foreign currency since April 2020 has allowed our retail chains to improve stock assortments, which in turn has increased traffic in our stores,” added the Group.

“While a sizable portion of our cash sales are in foreign currency, we believe that this proportion can be increased through favourable and consistent application of regulatory policies around trading in foreign currency.”

On retail performance, total retail merchandise revenue grew to ZWL 5.56billion representing a 70.1% increase from 2021 with credit sales constituting 61.2% during the period under review up from 43.5% in 2020 while cash sales contributed 38.8% down from 56.5% in 2020. 

The Edgars chain’s turnover accelerated by 73.7% to ZWL 3 billion from 2020’s ZWL 1.7 billion while 956k units sold were up 8.2% from 887.7k in the comparative period. The split between credit sales constituted 69.1% from 53% while cash sales were 31.2%  down from 47 .1%.

Total sales for the Jet chain were ZWL2.5billion up 78.6% from ZWL 1.4 billion achieved in the comparative period with credit sales coming at  45.5% up from 28.1% while cash sales contributed 54.5% a massive decline from 71.9% recorded in 2020. Total Units sold for the period were up 13% from 1.28m to 1.48m. 

Jet chain increased its store count to 31 stores from 27 stores in the comparative period while stock covers closed at 16.2 weeks from 16.9 weeks recorded in 2020.

Manufacturing division, Carousel recorded a 127.2% revenue growth to ZWL 334million despite a recession in total units sold by 42.1% to 165k from 286k in 2020. 

“Demand in the prior period was largely driven by Covid - 19 PPE such as the manufacturing of masks, however, management has been actively seeking alternative markets, which has seen the division securing and delivering on its first export sales order in the period,” the Group said.

“Investment in various re-tooling and machinists training is ongoing which will see the division expanding on its product offering as well as improved efficiencies.”

At Club Plus Microfinance, the loan book closed at ZWL 151 million, a significant jump from ZWL 30.3 million recorded in 2020 while asset quality remained positive with over 80% of the book being in current. 

“Improved efficiencies in loan approval and disbursement processes have resulted in increased turnaround and we have seen an increase in the uptake of loan applications through our online platforms such as the mobile app, this has provided our customers with added convenience.”

Going forward, the Group said it will continue to remodel its business to capitalise on opportunities that arise in the very uncertain operating environment with cost containment remaining the focus area to ensure long-term viability of the business.

“The Group seeks to expand its geographic footprint through the opening of new stores in strategic locations while smart merchandise procurement remains a key focus area to ensure that target margins are achieved without compromising the merchandise quality.”

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