Edgars on sound financial footing

ZMBABWE Stock exchange listed company, Edgars Stores Limited, continues to consolidate its sound financial footing after reducing borrowings to $4.6 million in the financial year ended January 7, 2018 compared to $11.2 million in 2016.

An analysis of the company’s abridged audited results for the period under review, shows that its ratio during the period improved to 2.6 from 2.3 during the same period in the prior year.

This means that the clothing retail outlet was able to meet its short-term financial obligations as well as improve its going concern status despite the challenging trading environment.

Total assets for the period under review were $50.4 million up from $47.8 million in the comparable period in 2017.

During the period under review, Edgars Stores Limited managed to reduce its total current liabilities to $13.9 million from $18 million.

Chairman, Mr Themba Sibanda said: “Improvements in merchandise assortments, customer service, promotions, revamps and the new political dispensation together with utilisation of excess Real Time Gross Settlement (RTGS) balances resulted in improved consumer confidence which contributed to a stronger second half sales.”

He said sales of merchandise for the year at $62.9 million were 25 percent above the 2016 figure of $50.3 million.

“Group margins were maintained at 43 percent. Credit management and debt collection costs continued to be well controlled and resulted in savings of $3 million on last year (55 percent).

“Other operating income and expenses were impacted by increases in software and computer costs, bonus payments and a reduction in commission and other income,” he said.

Mr Sibanda said the decrease in finance income was due to the reduced debtors book and arrears levels.

During the period under review, Edgars total sales were $39.6 million compared to $33.9 million in 2016.

He said Edgars Stanley House in Harare and Gweru branches were revamped and the Rusape branch was converted to Jet Store.

“Chain profitability improved to 24 percent up from 18 percent in 2016.”

In the period, the group’s factory made a trading loss of $0.6 million compared to $0.4 million in 2016 as performance of the manufacturing unit was affected by supply chain constraints due to the severely restricted foreign currency allocation for fabric.