TV Sales outperforms

Published: 20 March 2014

Zimbabwe Stock Exchange-listed conglomerate, Innscor Africa Limited's TV Sales division outperformed the group's key bakeries and fast foods segments after its revenue for the six months ended December 31, 2013 jumped 14 percent.

The bakeries and fast foods segments produced a "disappointing result", the company has revealed Innscor Africa Limited also has milling and protein businesses in Zimbabwe and Africa.

Board chairman, David Morgan, said their TV Sales division recorded a "good revenue growth of 14 percent" as compared to the prior period.

"This was on the back of four additional store openings as well as a revised installment credit offering which was increased to 24 months from 12 months," said Morgan.

The group opened new stores in Harare, Chitungwiza and Gweru during the period under review, bringing the total network to 31 as at the end of the current reporting period. Three more stores are planned for opening during the second half of the current financial year in Machipisa, Rusape and Zvishavane.

"The six-month revolving credit scheme which was introduced in the latter part of the previous financial year continues to perform well and has had the desired effect of increasing sales on smaller appliances and mobile devices," Morgan said, adding: "Collections remain good on both debtor books."

However, despite the good local performance, Capri volumes were depressed during the period under review, being 12 percent behind those recorded in the comparative prior period.

On the other hand, the bakeries and fast foods division comprising the group's bakery operations based in Zimbabwe and other fast food operations across the African content did not do well during the period under review.

Morgan explained: "The bakery operations produced a disappointing result with volumes declining by 10 percent over the comparative period. In Zimbabwe, fast food operations customer counts were similar to those achieved in the comparative period but profitability was negatively affected by lower margins and increased overhead costs."

He said owing to the current market conditions, production in Harare would be consolidated at the Graniteside facility while the remaining site would be moved to care and maintenance until demand improves.

"In addition, the business is currently undergoing extensive review of its overhead base so that profit efficiencies are restored to expected levels," said Morgan. Notwithstanding the six months which Morgan described as "extremely challenging" the group raked in $525,2 million in revenue, an operating profit of $47,3 million and a profit before tax of $34,89 million. Morgan said that going forward, the group would explore ways of securing grains locally to ensure reduction in prices to the local consumer.

"The group is a larger user of grains, particularly maize, and is currently heavily reliant on expensive, imported product due to insufficient local production to meet demand," he said.
- fingaz