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Nqobile Bhebhe, Senior Business Reporter
RETAIL chain, OK Zimbabwe, is expanding its footprint by diversifying into horticultural and pharmaceutical trade as negotiations are at an advanced stage to acquire the Food Lovers Market business in Bulawayo, Borrowdale and Avondale.
The group expects to commence rolling a new instore pharmaceutical offering — Alowell Pharmacies — during this festive season.
In a trading update for the six month period ended 30 September, board chairman, Mr Herbert Nkala, said negotiations to acquire Food Lovers outlets kicked off in the period under review.
The talks have since received a major boost by receiving the requisite regulatory approvals and is now proceeding to conclude the transaction.
The move is aligned to the new strategy of augmenting the group’s premium offering, he noted.
“During the reporting period, the company commenced negotiations for the acquisition of the Food Lovers Market business in Borrowdale, Avondale and Bulawayo, said Mr Nkala.
“The negotiations included the acquisition of a Territorial Licence Agreement that will see the company refreshing the existing stores and expanding the brand representation in the Zimbabwean market.
“Subsequent to the reporting period, management received the requisite regulatory approvals and is now proceeding to conclude the transaction. The acquisition is well aligned to the new strategy of augmenting the Group’s premium offering.”
In the period under review, the retail chain store conceptualised and registered a new instore pharmaceutical offering under the name and style of Alowell Pharmacies.
On its financial performance, the group highlighted that revenue for the half-year grew by 34,91 percent to $129 billion from $95,6 billion in the comparative period.
Volumes, which had marginally grown by one percent during the first quarter, declined during the second quarter to result in a net decrease of 8,23 percent over the half-year owing to depressed consumer spending power. Profit before tax for the period increased by 150 percent to $7,6 billion.
Capital expenditure for the period was $2,1 billion, down from $3,9 billion in inflation adjusted terms for the same period in the prior year. The capital expenditure was largely deployed on store refurbishments.
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