Vusumuzi Dube
Rutendo Nyeve, Sunday News Reporter
LISTED supermarket retailer OK Zimbabwe limited has posted revenue growth of 33.3 percent for the year ended 31 March bringing it to $311.3 billion from $233.6 billion in the comparative period.
In historical cost terms, revenue grew by 327.6 percent to $260.5 billion from $60.9 billion.
The company’s chairman Mr Herbert Nkala revealed the growth in his report released with the audited abridged financial results for the year ended 31 March 2023 which however saw profits being denigrated by increased operational costs.
Revenue for the year grew by 33.3 percent to $311.3 billion from $233.6 billion in the comparative period. In historical cost terms, revenue grew by 327.6 percent to $260.5 billion from $60.9 billion. Volumes for the year declined by 7.7 percent over the comparative period owing to local currency liquidity shortages and depressed consumer spending power,” said Mr Nkala.
Regardless of this growth, Mr Nkala said the operating environment remains constrained with the local currency liquidity challenges continuing to negatively impact formal retail volume performance.
“The exchange rate volatility, high inflation and interest rates remain significant challenges facing the business. Overheads continue to rise driven by wage inflation and the growth of utilities and service industry expenses. The Board and Management remain vigilant in protecting the Group from the relentless shocks arising from the volatile economic environment.
“Volumes for the year declined by 7.7 percent over the comparative period owing to local currency liquidity shortages and depressed consumer spending power. The informal sector continued to expand at the expense of the formal retail sector as a result of exchange rate distortions in the market,” said Mr Nkala.
He said the company’s profit after tax decreased by 36.0 to $5.2 billion (Last year: $8.1 billion) whilst in historical cost terms, the profit after tax increased by 111.7 percent to $5.1 billion (Last year: $2.4 billion).
“The profit performance was impacted by the increase in operating costs arising from increased usage of generator fuel due to acute power outages, inflation pressures embedded in forward pricing by market players, as well as exchange rate induced cost increments on labour, cleaning and security costs. The Group has taken measures to reduce and contain costs to improve its profitability going forward,” said Mr Nkala.
Meanwhile, Mr Nkala also spoke on their acquisition of Food Lover’s Markets in the country saying it is part of their strategic thrust to expand footprint in the premium segment of the market.
Food Lover’s Market has business outlets in the up market suburbs of Borrowdale, Avondale and Bulawayo’s Bradfield shopping centre.
“During the year, the Group successfully concluded the strategic acquisition of the Food Lover’s Market business in Borrowdale, Avondale and Bulawayo’s Bradfield shopping centre after receiving the necessary regulatory approvals. This acquisition, which comes with a Territorial License Agreement for the Zimbabwean territory, will bolster the Group’s strategic thrust to expand its footprint in the premium segment of the market.
“This will see the Group refreshing the existing stores and expanding the brand representation in the territory. The addition of the Food Lover’s Market franchise arrangement will create further supply chain and logistics optimisation that will benefit the entire Group with premium product offering,” said Mr Nkala.
Online Reporter