Edgars Stores Limited releases its 2014 interim financial results and presentation for the period ended 5 July 2014. Below are excerpts from the results and Chairman's commentary.
Group CEO of Edgars Stores Limited, Linda Masterson
Financial highlights
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Retail sales up 8% to $29.5m
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Profit before tax remained flat at $1.6m
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Earnings per share down 6% to 0.41 cents
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Trade and other receivables increased by 19% to $22.7m
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Number of accounts grew by 8% to 203 728
Retail operations
In the Edgars chain new stores were opened in Victoria Falls and downtown Harare, bringing the total number of Edgars branches to 28 (2013; 24). The chain's turnover increased by 7.4% (like-for-like, 3%) while profits declined by 9.7%. July trading was strong and cost control efforts started bearing fruit resulting in improved profitability. 89.9% of the chain's sales in the first half were credit sales (2013; 89.4%) and stock cover was 11.7 weeks (2013; 11.6 weeks).
The Jet chain contributed 18.8% to the Group's turnover (2013; 18.2%). Total turnover for the 25 stores (2013; 18), was 12.3% above last year (like-for-like; - 18.0%). July trading was more buoyant and both profitability and old store growth rates improved. The chain has been seriously affected by price-based competition from the informal sector and unbalanced assortments arising from the rapid expansion last year. Concerted efforts to improve pricing and product assortment are underway and we expect a turnaround for the chain in the last quarter. Closing stock cover was 12 weeks, which is a solid improvement from the 16.7 weeks last year.
Dividend
No interim dividend has been declared as the Group has still not reached the desired level of gearing.
Outlook
Our main focus remains on improving our customers' shopping experience through providing more value and wider choice. The ERP implementation is planned to lead to improved productivity, merchandise planning and customer service...
Appreciation
I am grateful to board colleagues, management and staff for their steadfast efforts in this tough operating environment, our customers for their loyalty and our landlords, bankers and suppliers for their continued support.
T N Sibanda - Chairman
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