HARARE – Zimbabwe Stock Exchange (ZSE) listed clothing manufacturer and retailer Edgars Stores returned to profitability in the financial year to December 2021 after recording a profit before tax of $590 million.
This comes after the group recorded a loss before tax of $290 million in the year to December 31, 2020.
In a statement accompanying results, group chairman Thembinkosi Sibanda said, “Notwithstanding the challenges in the operating environment, the Group managed to close 2021 with an improved performance over the year.”
During the financial year the group reported revenue of $6,9 billion, which was 82,5 percent up from the $3,7 billion achieved in 2020.
Mr Sibanda said this was a demonstration of the various initiatives implemented by his management to ensure fresher stock was available in our stores.
In the year under review, total group units sold increased by 4,1 percent from 2,4 million to 2,5 million compared to the same period last year.
During the same period, Carousel, recorded its first export sale to Botswana, bearing testament of 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.
“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,” Mr Sibanda added.
Edgars gearing ratio increased to 0,5 in the current year from a prior year of 0,3.
Funding was channelled towards growing the debtors’ book as well as store expansion initiatives.
At the end of the reporting period, the company had US$241 000 foreign liabilities which it said it will be able to service from existing resources.
On the operating environment, Mr Sibanda said, “Throughout the financial reporting period of 2021, the operating environment remained volatile.
“The group continued to trade under challenging socio-economic conditions and effects of various regulatory pronouncements.”
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.
“Operating costs are increasing, with occupancy, employment, intermediated transaction tax and fuel costs being some of the significant costs that continue to rise,” added Mr Sibanda
However, Edgars said its management remained focused on recalibrating the business models in response to these price corrections to preserve value and build a strong balance sheet for the business.
In their outlook, the clothing retailer said it will continue to remodel the business to capitalise on opportunities that arise in the very uncertain operating environment.
Cost containment remains a focus area for the company so as 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 whilst smart merchandise procurement also remains a key focus area to ensure that target margins are achieved without compromising the merchandise quality.
Edgars pledged to continue to transform their customer experience through updating their stores to world class standards and offering widened merchandise ranges at affordable prices and flexible credit terms.