HARARE, Zimbabwe (News of The South) – Edgars Stores Limited says its year to date turnover to September 2019 rose 154% on last year while units sold went down 23% in a trading period characterised diminishing consumer purchasing power.
The group has reported this trading update on the basis of historical cost.
With the macroeconomic conditions continues to deteriorate, it further reduces consumer disposable incomes and compromising product demand. But, the business is adequately stocked to meet the festive season demand. Retail inventory increased by 454% to $56 million when compared to same period last year. EBITDA at $52.5 million was 604% up from last year.
Despite the challenging operating environment, the group opened a new Jet Store in Blanket and secured premises for another Jet store in Chegutu which will open for Christmas trading. Edgars chain is returning to the Kadoma market and a new store will open there on Black Friday, 29 November 2019.
Edgars Chain saw its unit sales declining by 25% compared to 2018 while dollar sales as at end September trading were 151% above last year. Jet Chain’s unit sales were down 23% compared to 2018 while dollar Sales as at end September trading were 146% above last year.
Carousel’s unit sales were down 9% over 2018 while dollar sales as at end of September trading were 240% above last year. However, about 2% of total sales were exports. Club Plus saw its loan book size surging by 58% to $5.8 million. Also its Interest Income for the period was $2.9 million being 189% increase from last year. EBITDA stood at $1.6 million.
The group debtor’s book (net of allowance for credit losses) went up by 113% to $45 million. On the debtor’s book quality, 3.9% of the debtor book were over 30 days due and 83% was current. The book is clean.
Total active accounts at the end of September were 145 737 from 154 045 in 2018. The Group has a hedging policy in place to preserve its debtors book against inflationary effects. Also, interest rates have been increased on all credit products.
During the period under review, total borrowings have increased to $23 million from $7.5 million last year. However, $10.1 million is payable within 12 months and the balance is payable over the next 2 years.
“We expect our borrowings to continue to grow due to increasing working capital requirements in the face of rising inflation, and the need to grow foot print and give stores a facelift in critical locations,” said group chief executive officer Linda Masterson
Finance costs increased by 240% compared to last year. She said the cost line continues to increase in line with increasing minimum lending rates.
Trade and other liabilities of $31 million are 264% up on last year. The Group’s foreign liabilities at the end of September stood at Euro 280 000. Included in other payables is an accrual of $2.3 million for franchise fees. The group has since applied to the Reserve Bank of Zimbabwe to register this as a legacy debt.
In the outlook, the group is planning for positive unit growth in the last quarter to December 2019.
“The business is committed to delivering growth to shareholders and good products at the best prices to our customers. We are geared to take advantage of any opportunities that arise,” she said.
Previously, the clothing firm have been investing millions of dollars towards recapitalisation of its manufacturing division, Carousel, so that it will produce competitive products that will penetrate other export markets.
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