OK revenues surge to US$89m

a strong capital injection from South Africa’s Investec.
Chief executive Mr Willard Zireva, giving a trading update at the group’s Annual General Meeting in Harare yesterday, said the new OK Mart store contributed 8,3 percent to total revenues.

He said OK Mart was expected to make losses for the first three months but managed to recover in the third month.
Mr Zireva said during the period, shrinkage as a percentage of sales had been brought down to below industry levels of about 1 percent.
Gross profit margins for the period were recorded at 17,9 percent compared with 17,8 recorded during the same period last year.

During the same period, profit before tax grew 500 percent compared with the previous year.
“We are expecting better margins going forward. We experienced diluted margins in June during the Grant Challenge (promotion), where we normally have low margins and high markdowns,” said Mr Zireva.

Mr Zireva added that OK Mart was already breaking even and the group is expecting growth as they continue with their refurbishment exercise, being financed from previous fund-raising initiatives and internal resources.

The group plans to open a new branch in Westgate before the end of August.
OK now has a lease for Bon Marche Mount Pleasant where they did not have a licence. The shop would also be undergoing refurbishment.
Three other shops – OK Marimba, Bon Marche and OK Fife Avenue – would also undergo refurbishment during the remainder of the year.

For the full year ended March 2011, OK generated US$257,4 million compared with US$187,5 million in 2010.
Capital expenditure for the 12 months was US$9,4 million compared with US$1,5 in the previous year.

This expenditure was in respect of refurbishment of branches, replacement of computer equipment, replacement of plant equipment, generators, and on overhauling the operations and distribution vehicle fleet.
OK closed the year with 51 outlets comprising 37 OK stores, six Bon Marche stores, six OK Express stores and two OK Mart Stores, which were acquired when the group took over the assets of Makro Zimbabwe in the last quarter of the financial year.

OK has continued to import the bulk of its products from other countries as the local market still does not have the capacity to meet local demand.