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Edgars Stores Posts Solid H1 Earnings Buoyed By Volumes Recovery

Listed clothing manufacturer and retailer, Edgars Stores Limited posted a 540 percent profit jump to ZW$1.21 billion for the 26 weeks ended 10 July 2022 buoyed by volume recovery and replacement cost-based pricing among others.

Total Group units sold increased by 35% from 0.94million to 1.27million compared to the same period last year.

In its interim results 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.

“The growth in real terms is attributed to volume recovery, replacement cost-based pricing, ongoing cost management practice as well as initiatives implemented by Management to ensure fresher stock availability in our stores, regardless of the supply chain challenges,” Chairman Thembinkosi  Sibanda said in a statement accompanying the Group’s financial results.

“Trading in foreign currency since April 2020 has allowed our retail chains to improve stock assortments, increasing traffic in our stores. Whilst a sizable portion of our cash sales are in foreign currency, we believe that further relaxation of foreign currency trading will go a long way in increasing our USD generation to fund imports.”

Group’s revenue increased by 114 percent to ZW$10.33 billion from ZW$4.82 billion recorded in 2021.

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Total retail merchandise revenue amounted to ZW$ 7.97billion representing a 124 percent increase from prior year. The split between credit and cash sales was 53.8% (2021: 52.2%) and 46.2 % (2021: 47.8 %).

The Edgars chain recorded turnover of ZW$4.74billion up 116% from prior year of ZW2.19billion, the 532k units sold were up 55% from 344k in the comparative period.

Total sales for the Jet chain were ZW$3.41billion up 101% from ZWL1.69billion achieved in the comparative period. Total Units sold for the period were up 28% from 526k to 674k. The 3 new stores opened in the period include Jet First Street, Avondale and Gutu. Stock covers closed at 18.68 weeks (2021:15.7 weeks).

At Club Plus Micro­finance, the loan book closed at ZW$299 million representing a 293 percent increase from prior year.

“Asset quality remains positive with over 74.5% of the book being in current. Improved efficiencies in loan approval and disbursement processes have resulted in increased turnaround.”

The business unit obtained relevant regulatory approvals to disburse loans in USD.

At Carousel Manufacturing, the division recorded turnover of ZW$309.8million up 237 percent over prior year although total units sold were down 7 percent to 68 900 from 74 000 which the group attributed to weakening demand which in previous year had been largely driven by Covid – 19 PPE such as the manufacturing of masks.

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Cost containment remains a focus area so as to ensure long-term viability of the business.

“The Group seeks to expand its geographic footprint through the opening of new stores in strategic locations. Smart merchandise procurement remains a key focus area to ensure that target margins are achieved without compromising the merchandise quality,” said Sibanda.

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