Edgars records $281k loss in 4 months

Edgars records $281k loss in 4 months
Published: 29 May 2014
ZIMBABWE Stock Exchange listed Edgars recorded a $281 000 loss in the four months to April 2014 when compared to the same period last year due to due to operating environment which tightened on the back of liquidity challenges and issues around civil servants salaries. , MD Linda Masterson told the AGM today.

"There was a slight recovery in sales after civil servants who make up the bulk of our customers received back dated salaries in April.

"However if there are no changes in the macro-economic environment, our results will be below target.

The ZSE-listed retailer's sales were declined 2.5% but the amount had recovered from the 3% drop in the first quarter of 2014.

Despite the lack of a credit bureau in Zimbabwe, Edgars leveraged on its account holders, with credit facilities accounting for about 72% of total sales volumes for the period. Current debtors were at 73.7% of the book against 76.5% last year.

The group is targeting a $4.7 million earnings but the group might post below estimate results if the economic situation does not improve.

Gross margins were at 45.3% and the group expects gross margins to be at 47.5% while trading profit is forecast to be 8% of turnover at the close of the financial year. Current debtors were at 73.7% of the book against 76.5% last year. The group had extended its credit scheme to 12 months starting May.

Analysts said liquidity in the country hinged on cash transactions, hence credit lines propped up Edgars Zimbabwe.

Edgars customer base grew to 200 000 from 197 932 at year end.

Other Zimbabwean companies are failing to access credit lines owing to the risk perception investors attach to Zimbabwe, although Edgars Zimbabwe could be leveraging on its relations with Edcon. Edgars competes in the local market against established clothing and apparel retailers such as Topics and other stores also offering clothing on credit.

Edgars has forecast a difficult outlook for the Zimbabwean economy, likely to be characterised by subdued purchasing power for the working class owing to the closure of companies and declining earnings for those still operating.

- BD
Tags: Edgars,

Comments

Latest News

Latest Published Reports

Latest jobs