HARARE – Truworths Zimbabwe says it will focus on growing profitability sustainably with emphasis being placed on increasing cash sales.
Group chief executive Bekhitemba Ndebele said in a statement of financial results for the year ended July 11, 2021 that consumer incomes had not recovered to pre-devaluation levels hence the group would remain cautious on credit granting.
“The business remains focused on growing profitability sustainably and the emphasis will remain on increasing cash sales participation,” Mr Ndebele said.
During the period under review, the company’s revenue declined to $286 million compared to $342 million in the prior year while after tax loss was at $67 million.
The business, Mr Ndebele noted, was negatively impacted mainly by Covid-19 induced lockdowns as it was classified as non-essential service.
“The second half of the reporting period was affected by the closure of the business for two months in January and February due to Covid-19 lockdowns,” he said.
He said during the first half of the year, units sold were 23,3 percent lower and further declined 59,3 percent during the third quarter of the year. The group’s fourth quarter saw improved sales as units sold increased 18,2 percent.
Mr Ndebele added that the closure of the business in January and February this year resulted in a loss of sales for the two months.
“In the absence of a relief package, the business incurred the full operating costs for the months of January and February which resulted in a Trading Loss for the quarter and half year,” he said.
Commenting on merchandise performance, Mr Ndebele said as a result of the Covid-19 lockdown measures in January and February, the factory did not receive the specialised winter fabrics for garment manufacture.
He said the retail chains relied on purchasing the limited and non-exclusive ranges from local manufacturers.
“Stock turnovers were good and there were no markdowns. Gross margins were firm,” Mr Ndebele said.
In terms of credit management, the book grew by 152,8 percent and 84,8 percent of the customers were in good standing and able to purchase compared to 80,3 percent in the prior year.
The Truworths chief executive said the doubtful debt allowance as a percentage of gross debtors was 6,7 percent compared to 13,4 percent in the prior year.
As a result, the business did not declare a dividend for the year. – Herald