adminstore brands such as OK Mart and the impact of the OK Grand Challenge.
The net sales were, however, short of analyst expectations with revenue failing to breach the psychological US$500 million mark. Revenue was achieved on the back of a poor agricultural season last year and record low inflation as well as modest gross domestic product growth of 5,6 percent.
Overheads grew at a faster rate than revenue growth at 19,2 percent to US$65,2 million from US$54,7 million a year ago, the company said in its financials published yesterday.
Gross margin for the year was at 17,6 percent compared to 16,9 percent last year due to tight competition and a higher consumption of low margin basic items.
Overheads as a percentage of sales increased from 13,3 percent last year same period to 13,6 percent in the just ended financial year.
The increase in overheads was mainly a result of increases in employee benefits. Management also indicated that insurance costs also increased due to growth of in asset values and the insurance excess paid under the fire claim.
The cost of borrowing increased to US$800 000 from US$500 000.
Attributable profit increased by 20 percent to close the year at US$12,4 million and the company paid a dividend of US0,4 per share to be paid on the 2nd of July 2013.
Operating cash flow was up 27 percent from US$14,9 million to close the year at US$19 million due to increased cash inflow from trading activities and a positive cash inflow from working capital changes.
Significant outflows were recorded in taxation with an outflow of US$3,5 million compared to US$3 million last year. Finance charges also reduced operating cash flow after almost doubling in the period under review.
The company invested US$10,1 million in the replacement of property plant and equipment compared to US$8,4 million in the prior year.
Increases in borrowings amounted to US$2 million compared to US$5 million as the company drew down the lines of credit from Investec and other local institutions at an average cost of 12,5 percent.
Assets grew by 22 percent from US$95,5 million to US$116,3 million due to investment in fixed assets and inventories on the current assets. Inventories build was targeted for the OK Grand challenge and the position is expected to unwind in the first half of 2014.
The conversion of the long term loan of US$5 million by Investec to equity at a price of US6,3c moved the loan from a long term loan to a short term borrowing and it is expected to be party of equity in the next financial year.
Online Reporter