Listed retail giant, OK Zimbabwe Limited’s revenue dropped by 2% to ZWL$34.3bn for the year to March 31, 2021 from ZWL$35bn a year earlier, partly owing to a tumultuous period largely caused by measures implemented by government to curtail the spread of Covid-19.
Volumes in the reviewed period declined 13%.
Amid the Covid-19 turmoil, the measures put in place to curtail the spread of Covid-19 also increased the cost base of OK Zimbabwe.
Exacerbating setbacks to the OK Zimbabwe’s business was the erosion of consumers’ disposable income.
Consequently, profit for the group plummeted 46% to ZWL$1.1bn during the year to March 31, 2021 from ZWL$2bn reported in the prior comparative period due to Covid-19 induced lockdowns which disrupted supply chains.
“The Covid-19 pandemic had a strong impact on our customers, the business and supply chain. (Its impact) on future operations remains uncertain,” OK Zimbabwe chairman Herbert Nkala said.
He said electricity charges, staff costs, cleaning costs and security expenses also contributed to overheads growth.
Capital expenditure for the year was ZWL$1.2bn down from ZWL$1.5bn in prior year while most of the capital expenditure was on store refurbishments and equipping the new store.
Total assets stood at ZWL$12.5bn in the reviewed period compared to ZWL$10bn in the previous year.
The group’s capital expenditure programme continued during the year with refurbishments completed at OK Avonlea, OK Machipisa, Bon Marché Belgravia, Bon Marché Eastlea, OK Kadoma, OK Rusape and OK Hwange.
Two new stores were opened, an OK store in Harare’s Sanganayi Inn area and an OKmart store in Victoria Falls.
The refurbished stores and new branches were well received in their respective markets and made a significant contribution to the group’s sales.
The group embarked on a brand repositioning exercise for all its store brands, namely OK, Bon Marché and OKmart to meet emerging customer requirements and market trends.
The refurbishment and expansion drive will be reinforced, with a number of stores targeted for refurbishment and potential new sites under consideration.
He said foreign currency availability and exchange rate stability improved during the year mainly due to the success of the foreign currency auction system introduced in June 2020 and this together with the liberalisation on the use of foreign currency for domestic sales under Statutory Instrument 185 of 2020 brought some stability into pricing and product supply.
The foreign currency component of the group’s sales remained low, although this was largely adequate for the group’s inventory and capital expenditure import requirements.
The group adopted sustainability reporting to reinforce its responsible business values.
Nkala, however, said the group was on track to recover following the resumption of the Grand Challenge promotion in the current financial year and is expected to underpin volume growth in the first quarter.
The group will also continue to pursue more innovative initiatives to grow market share profitably.