Edgars Group turnover grows 85pc

showed that very few companies have stabilised post dollarisation.
Many companies are showing capital stress and in need of adequate capital injection to recapitalise operations.
Retail giant Edgars Stores Limited gave its trade update for the five months to May 2011, with group turnover growing 85 percent to US$15,2 million.
Growth in turnover was on the back of a 47,1 percent growth in retail unit sales.
Resultantly, gross margins of 51,5 percent were achieved compared to 49 percent last year.
Dollar figures grew faster than units partly due to price increases filtering through after the cotton and wool price increase last year.
The bulk, however, was a result of the launch of up-market brands in October, as well as better stocking in areas that can carry better gains.
The number of debtor accounts grew to 127 910 from 111 119 reported at year-end and the debtors book currently stands at US$12,2 million.
Monthly collections were an average of 24 percent of opening debtors. Bad debt handover as a percent of lagged debtors was 0,49 percent.
Onto financing the group’s borrowings stood at US$16,7 million at the end of May at a cost of 16,49 percent per annum with financing tenor and rates improving.
The group projected the weighted average rate of interest to decrease to 16 percent from the 18,2 percent to December 2010.
Edgars projects the weighted average rate of interest to decrease to 16 percent from 18,2 percent in December 2010.
Merchandise assortments in ladieswear improved significantly with notable quality improvements being made by local suppliers. Imports and internationally recognised brands introduced in the stores are also performing well.
The group expects the half-year top line results to be around 90 percent up on last year while, at profit after tax level, the group is expected to produce a modest profit against the US$1,7 million loss last year.
In valuing Edgars, analysts say the company will maintain the momentum that they had in the first five months of the year with an improvement expected towards the festive season.
This should see them turning over US$43,8 million and if they sustain their 55,5 percent gross profit margins these should translate into 22,5 percent gross profits.
Trading at US9,5c, analysts expect there is a 39 percent upside in the counter. Given the low disposable incomes that are expected to improve though rather slowly and a relatively continuous profitable outlook on the group.
Meanwhile, TrustCo Mobile said it was taking Econet Wireless Zimbabwe to court seeking an interdict to compel Econet to reinstate the terminated contract for the former partner’s mobile based insurance product, EcoLife.
TrustCo Mobile, the mobile telecommunications arm of Johannesburg Stock Exchange-listed TrustCo Group Holdings, also seeks to prevent Econet from infringing on the Namibian firm’s intellectual property rights.
It has emerged that while Econet has hitherto denied owing TrustCo, the Namibia firm claimed it is owed an estimated US$4,8 million in royalty fees.
TrustCo said it would file a High Court application sometime this week.
TrustCo denied claims by Econet it had unilaterally terminated the contract with Econet, but instead said the local mobile phone operator walked out.
Last week, Meikles Limited announced that its chairman Farai Rwodzi had resigned from the group and John Moxon takes over as chairman.
The market is waiting to see how Moxon is going to add value to the company after its much-hyped demerger with Kingdom Financial Holdings Limited.
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