Published: 29 September 2017

COLCOM Holdings Limited, a division of Innscor Africa Limited consolidated its solvency by over 23 percent, the firm's financial statements for the year ended June 30, 2017 show.

During the period under review, total assets were $46.6 million up from 45.2 million as at June 30, 2016 while total liabilities stood at $8.9 million down from $10.7 million in the comparable period last year.

An analysis of the financial results indicate that the firm's current ratio jumped to 5.2 as at June 30, 2017 reflecting a 23.8 percent increase from the June 30, 2016 current ratio of 4.2.

This means that during the period under review, Colcom's financial position firmed by 23.8 percent thereby consolidating the firm's ability to meet its short-term liabilities.

The statement of the financial position also show that Colcom was not highly leveraged as its debt-to-asset ratio was at 19 percent.

This means that the company was less risky in terms of failing to pay its debt acquired from borrowers to finance its operations or expansion programmes as most of its assets and operations were financed from owners' equity.

Colcom chairman, Mr David Longo said operating expenditure increased by five percent over the prior year predominantly on increases in selling costs driven by the opening of additional Texas branded stores.

"Additional costs of bank transactions resulting from cash in transit, electronic transactions and telegraphic transfer charges and rebates paid to retailers. Financial income declined due to the relative stability of the rand in the current financial year," he said.

The group recorded an operating profit of $4.94 million, which was two percent below that reported in the prior year.

The negative swing in fair value adjustments on biological assets of $0.51 million compared to the prior year contributed to the group delivering a profit before tax of $6.5 million, nine percent behind that recorded in the previous financial year.

During the period under review, Colcom declared a final dividend of 0.43 cents per share payable in respect of all ordinary shares of the company. 
- the herald

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