Chronicle Editor
Business Reporter
LEADING retail chain, OK Zimbabwe says the prevailing strain on the country’s economy that has been characterised by product shortage and price increases is “temporary”.
Board chairman Mr Herbert Nkala said OK Zimbabwe was looking into the future and would forge ahead with its investments in the country in anticipation of brighter prospects.
In a statement accompanying the company’s financial results for the quarter ended 30 September 2018, he acknowledged the recent fiscal and monetary policy interventions by Government, which seek to protect savings, restore stability and tame shortages, which sparked the recent price madness and depleted stocks in the stores and warehouses.
“Despite these challenges, the board and management believe that the current market dynamics are temporary and the outlook remains positive in the medium to long-term,” said Mr Nkala.
“The group continues to explore opportunities to grow market share profitably in order to enhance shareholder value.”
Under the Transitional Stabilisation Programme (TSP) Government is already undertaking a string of comprehensive measures aimed at arresting fiscal disequilibrium, reforming the investment climate and stimulating the productive sector.
In line with its vision, Mr Nkala said OK Zimbabwe will continue with the refurbishment of its outlets as planned and that a new store would be opened in Masvingo before the end of the year.
During the period under review, the retail chain opened a new store in Glen View, Harare while its branch in Marondera was expanded and refurbished, a development that saw the branch’s sales responding well to the improved offering. Refurbishment work was also completed at OK Bon Marche Chisipite in Harare with customers reported to have responded well to the new look outlet. Capital expenditure for the period under review was $7,5 million, up from $4,9 million for the comparable period.
“This was spent on acquiring properties, refurbishment of stores and replacement of equipment,” said Mr Nkala.
OK Zimbabwe increased its revenue by 23,2 percent to $330,1 million from $268 million in the comparable period. Profit before tax of $11,6 million was up by 64,8 percent on the comparable period’s $7 million while profit after tax increased by 66,3 percent to $8,4 million from $5,1 million in the comparable period. This, Mr Nkala said, was primarily driven by volumes, efficiency and inflation.
“Overheads increased by 18,4 percent to $45,7 million from $38,6 million in the comparable period. Banks charges and rentals increased in line with the growth in sales levels. The group managed to restrict the overheads growth to below sales growth in order to improve profitability,” said Mr Nkala.
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