Profit for hardware retail chain Powerspeed Electrical Limited, for the half year to March 31, 2018 surged 252 percent to $2 million on product range expansion and availability. Turnover jumped 55 percent to $37,2 million compared to $23 million during the same period last year as gross margins improved to 28,1 percent from 26,3 percent on improved sourcing. Resultantly, gross profit increased by 66,1 percent to $10,5 million.

During the period under review, Powerspeed opened two new branches in Harare, one in Pomona, and the other in the Village Walk Complex, in Borrowdale.

“We are satisfied with the progress we have made towards our goal of establishing Electrosales Hardware as the leading brand for the retail and wholesale supply of all types of hardware and home improvement products.

“We have been expanding our range and availability of products. By purchasing high quality products at the best possible prices, we are sure that we are getting the best value for money, which we then pass on to our customers,” said Powerspeed in statement accompanying the group’s financial results.

At $3,3 million, operating profit was 180 percent above prior year’s $1,1 million. Due to the branch expansion programme the firm undertook in the period, operating expenses grew by 37,6 percent to $7,4 million.

Borrowings remained high, at $9,9 million and as a result, finance costs increased by 39,6 percent to $566 000. “However, given our recent investments in property and in inventory to feed the growth in throughput, we believe that this level of borrowings is less concerning than in previous years,” said Powerspeed.

The Engineering division increased throughput which improved its contribution to the group. This was mainly buoyed by steady increase in demand as business optimism and activity continues to improve especially in the mining sector.

As a result, throughput and profitability in the operation, grew to $1,4 million from $888 000 and to $216 000 from $52 000 respectively.

Although disposable incomes remained limited, management at Powerspeed remains upbeat and encouraged by the substantial growth in throughput the business achieved as well as prospects of economic fortunes spurred by promises of credible elections and re-engagement processes.

“As always, we are optimistic about the future prospects of Zimbabwe, and the opportunities that these will bring to our business.

“We have identified a number of opportunities for increasing our footprint in the market, and we will be moving to open more branches,” said Powerspeed. No dividend was declared.