Taurai Mangudhla
Edgars Stores Limited is on an aggressive campaign to increase exports to 15% of revenues from the 5% recorded last year, Linda Masterson, the group managing director has disclosed. According to her, the group will take advantage of the export competitiveness brought about by market distortions since October 2018 that have resulted in exporters becoming more competitive.
Speaking at the company’s 2018 unaudited results briefing in Harare yesterday, Masterson said foreign currency shortages were not a concern for Edgars to grow its exports and meet the 2019 targets, given the structure of the business. “A lot of the products we export are through toll manufacturing, which means the product is imported into the country and then goes out.”
She said the company was targeting a 35% turnover growth this year, and 40% growth in after tax profit, “which is geared to be below 30%”.
Actual budgets are, however, more conservative than the announced targets, Masterson said, without giving specific figures. Going forward, Edgars expects to see some stability in the forex market.
“We are not yet at a stage where the forex market has stabilised, but I think it will. We will see downward pressure on prices which is going to be good for the economy as a whole,” Masterson said.
Last year, Edgars suffered a huge knock in the last quarter of the year due to foreign currency distortions that saw prices more than triple overnight and companies unable to import raw materials.
Edgars’ unit sales slipped 10% as customers’ disposable income dwindled and spending skewed towards essentials.
As a result, the company was not able to stock some product lines, in particular cosmetics and footwear. Edgars now plans to aggressively take risk after reporting a drop in new accounts over the past few years.
Masterson said cash sales were growing as customers closely monitor currency risks. She said the Jet brand was growing significantly alongside Edgars own brand, which is doing very well.
In terms of financial performance, the Group reported an after tax profit of $8.5m, up from $4m in the prior year, after a $14m revenue growth to $78m.
Total comprehensive income closed the year at $13,3 million after factoring a $6,5 million from revaluation of property, plant and equipment.
Earnings per share more than doubled 3,29 cents per share, from 1.54 cents per share in 2017.
The group declared a dividend after what managed termed a drought.
