Chronicle Editor
Pride Mahlangu, Business Reporter
POWERSPEED Electrical Limited says its market share has increased significantly resulting in total sales volumes growth for the financial year ended 30 September 2019.
The group’s income clocked $18 million, significantly up from $4 million recorded in the last financial year, while earnings per share reached five cents from one cent from the previous year.
Turnover for the year rose by 225 percent, to $270 million, while gross margins rose 182 percent from $22 million to $62 million.
“The group performed commendably during the year under review, given the difficult operating environment in Zimbabwe, and despite increased competition.
“The numbers we are reporting suggest that we have been able to further increase our market share,” said the group in a statement accompanying the latest financial results.
“We maintained the focus on building the Electrosales Hardware brand to be the biggest and best supplier of hardware and home improvement products throughout Zimbabwe. Although year on year growth was slower than we planned, we still recorded an increase in total volumes.”
However, finance costs for the period under review rose marginally, from $1.12 million to $1.39 million, resulting in a profit before tax of $21 million, compared to $6 million, for the previous year.
Powerspeed said in previous years, their key strategy was to grow sales volumes and increase inventories to mitigate against the impact of erratic supplies.
These improved levels of product availability, have led to increased sales, as well as profitability, said the company. However, the shift in product range towards building materials has put the group’s margins under pressure.
During the period under review the company’s inventory values rose from $20 million to $267 million while borrowings rose from $9 million to $16 million, although substantially reduced in real value terms.
The group said it added one new branch during the year, bringing its total number of branches to 19 countrywide.
Powerspeed conducted some extensions and renovations in a number of branches, raising their total retail space to 13 405 square metres. — @pridesinstinctz.
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