NTS mixed sourcing pays off

NTS mixed sourcing pays off
Published: 04 July 2018
National Tyre Services (NTS) says its mixed bag strategy to supplement direct sourcing with local supplies and pushing sales of premium products to improve margins has started paying dividend.

This was after the company's profit after tax surged to $118 000 in the full year to March 31, 2018 compared to a loss of $156 000 in the 2017 corresponding period.

"Sales and gross profit increased by 16 percent and 35 percent respectively," the group's chairperson Rutenhuro Moyo said on Monday.

He added that the mix of budget and premium brands also ensured that out of stock situations were minimised.

"Generation of cash remains a paramount requirement for our industry.

Cash on delivery sales for a large part of our customer base was introduced and this led to a significant reduction in debtors."

Moyo further indicated that the company continues to extend its full service offering across as many branches as possible to supplement the new tyre business.

"The opening of a new branch in the Harare Market Square Area enabled the introduction of new services such as exhausts and suspension on a pilot basis. If successful this service will be rolled out to all other branches.

"The distribution footprint will be extended to cater for demand expansion as traffic flows develop. Several branches have been earmarked for refurbishment and repositioning with the support of a major international supplier," he said.

Given the significance of road freight and agricultural and mining thrust in the country, Moyo said, the sectors will benefit from NTS's continued offer of its retreading products.

"The company will continue offering retreading products in line with customer demands for quality and value. Cost cutting has enabled extension of affordable prices to the market segments concerned.

Relations with our major rubber suppliers remain good and this has guaranteed continuity of supply," he said.

Going forward, NTS expects that its significant investment in information technology with the introduction of systems, applications and products, will complement the distribution footprint expansion and repositioning campaign.

- The Financial Gazette
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