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Friday, September 30, 2022
HomeBusinessEdgars FY-22 Earnings Improve on Increased Forex Earnings

Edgars FY-22 Earnings Improve on Increased Forex Earnings

Clothing retail giant, Edgars Stores Limited recorded a Profit After Tax of ZW$ 710.9 million for the year ended January 2022, an improvement of 82.5 percent as total units sold increased by 4.1 percent from 2.4 million previous year to 2.5 million.

The positive performance was also aided by the group’s manufacturing concern, Carousel which made its first export sale to Botswana amounting to $5.1 million as the company sought to explore alternative markets.

In its FY-22 financial statement, the group said trading in foreign currency since April 2020 has allowed its retail chains to improve stock assortments, which in turn has increased traffic in its stores.

“While a sizable portion of our cash sales are in foreign currency, we believe that this proportion can be increased through favorable and consistent application of regulatory policies around trading in foreign currency,” the group said.

Group revenue was 294.8 percent ahead of prior year at ZW$ 6.731 billion from ZW$ 1.705 billion.

However, Operating expenditure grew pressured by occupancy, employment, intermediated transaction tax and fuel costs resulting in gross margins being reduced to 52.5% from 63.6%.

The Edgars chain recorded turnover of ZW$ 3billion up 73.7 percent from the prior year of ZW$ 1.7billion, as 956 000 units sold were up 8.2% from 887.7k in the comparative period.

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The split between credit and cash sales was 69.1 percent and 31.2 percent.

Gearing increased to 0.5 in the current year from a prior year of 0.3.

“Funding was channelled towards growing the debtors’ book as well as store expansion initiatives. At the end of the reporting period, the company had USD241k foreign liabilities which it will be able to service from existing resources.”

At Carousel Manufacturing, turnover of ZWL334million was up 127.2 percent over prior year. However total units sold were down 42.1 percent to 165 000 as demand in prior period was largely driven by Covid – 19 PPE such as the manufacturing of masks.

Investment in various re-tooling and machinists training is ongoing which will see the division expanding on its product offering as well as improved efficiencies.

At Club Plus Microfinance, the loan book closed at ZW$ 151 million compared to ZW$ 30.3Million prior year representing a 399 percent increase.

“Asset quality remains positive with over 80% of the book being in current. Improved efficiencies in loan approval and disbursement processes have resulted in increased turnaround. We have seen an increase on the uptake of loan applications through our online platforms i.e. the mobile app, this has provided our customers with added convenience.”

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The Group did not declare a dividend for the 52 weeks to 09 January 2022 and added that the decision would be reviewed having assessed the performance in the current year.

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