Edgars Stores Limited releases its 2014 abridged financial results and presentation for the period ended 10 January 2015. Below are excerpts from the results and Chairman's commentary.
Group CEO of Edgars Stores Limited, Linda Masterson
CHAIRMAN’S STATEMENT
The Group achieved satisfactory results which were largely due to the Group’s focus on offering our customers various credit options, improved assortments and superior customer service. In the Edgars chain these initiatives were underpinned by the re-launch of the Club which incorporated the Hospital Cash Plan. Of importance was the successful management of the resultant growth in the debtors’ book...
Retail Operations
In the Edgars chain, launch of The Club and extended credit, in the form of a 12 months to pay option for our customers, drove the commendable 9.1% top line growth. At the end of December, The Club had a membership of 87 000. Profitability of the chain decreased by 6.6%, mainly due to the additional discounts offered to customers during the year. We will continue to focus on cost control, account growth and customer service...
Credit Management
Crucially, the growth in debtors was well managed and there was no deterioration in the quality of the book. In 2015, given the declining economy and company closures, some slight deterioration is expected. But, importantly, the quality of the book will remain good...
Manufacturing
Carousel had another successful year in 2014. The factory generated a profit before tax of $409 667 (2013: $341 905). Productivity and unit sales increased by 24.4% and 15.0% respectively, driven by the focus on menswear through the in house brand ‘QUOTE’. Ladies’ and childrens' ranges also experienced good growths over 2013. We are confident that we have captured the men ’s market for smart casual wear and this line will continue to be a great contributor in 2015 as the brand becomes better known in the market.
Financing and cash flow
The Group’s borrowings were $20.3million (2013: $16.5million) and gearing improved marginally from 1.00 to 0.94. Net of interest bearing debtors, gearing stood at zero. We do not foresee a significant change in the level of gearing in the short term as our debtors book will continue to grow.
Outlook
Our vision is to be the leading retailer of clothing and footwear. We will continue to focus on offering our customers more value and wider choice, applying tighter cost control and transforming our business processes. We anticipate the momentum gained in the last year to benefit us going forward.
Dividend
As additional working capital is required to fund the forecast growth in debtors and the upgrade of our information systems, no dividend will be declared.
Appreciation
I am grateful to board colleagues, management and staff for their dedicated efforts, our customers for their loyalty and our landlords, bankers and suppliers for their continued support.
TN Sibanda
Chairman
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