HARARE – Clothing retailer Edgars Stores Limited said on Friday its year to date profit after tax for the period ending May this year shot to ZWL$8.7 million from ZWL$1.3 million in the same period last year as the company continues to enjoy brisk sales.
Group managing director, Linda Masterson told shareholders at the company annual general meeting that turnover was up 90 percent compared to last year.
“June turnover was trending above 200 percent over the prior year until the announcement of Statutory Instrument 142 after which growth slowed down to around 100 percent,” she said in a trading update.
The government issued SI 142 of 2019 which introduced a raft of currency reforms chiefly banning the use of foreign currencies for local payments and re-introduction of the Zimbabwe dollar.
“We are positive that the change to the Zimbabwe dollar will bring some stability. We are geared to take advantage of any opportunities that arise, finance permitting,” Masterson said.
Group earnings before interest, taxation, depreciation and amortisation surged 524 percent to ZWL$16.3 million.
Masterson said the group had re-opened its Jet Store in Kadoma in April and was still on the hunt for a suitable site for its Edgars Store in the same town.
“Other revamps and new stores planned for this year, funds permitting, are Edgars Masvingo, Jet Masvingo and two to three new Jet stores,” she said.
Masterson said finance costs shot up 80 percent over the period, with borrowings shooting to ZWL$9.8 million from ZWL$3.5 million last year.
“We expect this (finance costs) to go up further in line with the expected increase in the bank lending rates,” she said.
“We plan to borrow more to fund capital expenditure requirements, growth in the micro finance unit and working capital, which has been under pressure due to inflation.”
She said the retailer’s debtors’ book was “at its cleanest since dollarization” while giving credit to “our credit teams and our customers for their timely payments.”
With recent jumps in costs of borrowing and increase in inflation, the Masterson said a review on interest rates charged on customer accounts was underway. –New Ziana