adminRevenue in the period under review rose to US$15 million compared from US$14,5 million during the same period last year with after-tax profit declining marginally to US$228 509 from US$235 608.
However, while revenue and profit- ability were heading southward expenses were northward bound, skipping 14 percent to US$4,1 million.
In a statement accompany the group’s financial results Powerspeed said the financial performance was below expected levels.
“As stated earlier, the performance of the trading operations did not meet expectations, mainly because of market conditions and mostly in the industrial and contracting sales area,” Powerspeed said.
Powerspeed said the increase in expenses, which negatively affected the company’s profitability, was as a result of retail expansion, which is expected to result in growth of throughput.
“As a result, earnings before interest and tax remained substantially unchanged at US$312 000, which resulted in static profit before tax of US$308 000. Marginal increase in taxation meant small reduction in attributable earnings from US$236 000 to US$229 000.”
The company said that close management of working capital had brought borrowings down to US$3,5 million from US$4,9 million a year ago.
Powerspeed said the drive to grow the Electrosales brand as a household name in hardware and electrical products was working with retail experience being steadily improved country wide.
However, the company admitted that efforts to improve sales to larger, corporate clients has not yielded great results to date, but attributed this to market constraints said the drive would be maintained.
The Zimbabwe Stock Exchange- listed company said the decision to cut overheads in the engineering divisions turned out to be correct as the operation maintained profitability despite low throughput.
But as a direct consequence of the decision, Powerspeed said there has been a loss of technical ability due to the changes, which the company inevitably has to recover when demand recovers.
The company said that its change in strategic direction last year was spot on and that it has positioned itself well to make the most from the current economic circumstances and the base it is developing now puts the company in a strong position to capitalise on opportunities in the improved economic environment.
Online Reporter