By Beaven Dhliwayo.
Harare, Zimbabwe. (News of The South)– Manufacture and trader of electrical products, Powerspeed Electrical Limited profit jumped 252 percent to $2 million for the six months ending March 31, 2018 on the back of an increased footprint and market share.
The Group’s turnover surged 55 percent to stand at $37.2 million compared to 23 million of the prior year while gross margins slightly increased from 26.3 percent to 28.1 percent.
This resulted in a 66.1 percent increase in gross profit to $10.5 million and during the period under review the Group opened two branches in Harare – one in Pomona, on Harare Drive and the other at Village Walk Complex, in Borrowdale.
In a statement accompanying the Group’s financial results, Powerspeed said it is pleased by opening Electrosales Hardware.
”We are satisfied with the progress we have towards our goal of establishing Electrosales Hardware as the leading brand for the retail and wholesale supply of all types of hardware and home improvements.
”We have been expanding our range and availability of products. By purchasing high quality products at the best possible prices, we are sure that we are getting the best value for money, which we then pass on to our customers.
“Despite the poor performance of the Zimbabwe economy, generally leaving consumers with very little disposable incomes, we are encouraged by the substantial growth in throughput that our business has achieved,” it said.
Operating expenses of the Group grew by 37.6 percent to $7.4 million compared to $5.4 million prior year.
Resultantly, operating profit increased by 180 percent, from $1.19 million to $3.32 million.
Powerspeed said borrowings remained high, at $9.9 million and as a result finance costs increased by 39.6 percent to $556 000.
“However, given our recent investments in property and in the inventory to feed the growth in throughput, we believe that these levels of borrowings are less concerning than in the previous years,” it said.
On its Engineering Division Powerspeed said although it is not their core focus, there are maintaining competence and capacity within the division.
“During the period under review, we have seen an increase in the throughput, which have resulted in an increased contribution from the Division. The improved levels of business optimism and activity, particularly in mining, are steadily improving demand.
“As a result, throughput and profitability in the operation, grew from $888 000 to $1.4 million, and $52 000 to $216 000 respectively.”
Going forward, the Group said it is optimistic about future prospects of Zimbabwe.
“We believe that the promises of free, fair and credible elections this year, will assist in normalising the Zimbabwe’s relations with the rest of the world, and bring us back into the global economy, thereby unleashing the potential of both our country and our business.
“We have identified a number of opportunities for increasing our footprint in the market, and we will be moving to open more branches. This will improve our market share areas where it is currently weak, without negatively affecting the existing branch network,” Powerspeed said.
In addition, the Group failed to declared a dividend for the period under review, citing the rate of growth of throughput and the relatively high levels of borrowings.
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