OK Zim splurges ZWL$3.1bn on capex
RYAN CHIGOCHE
Listed retailer, OK Zimbabwe Limited, splurged ZWL$3.1bn on capital expenditure projects in the year ended March 31, 2022 as it spruces up and opened new stores as part of its expansion plans.
The group refurbished several outlets across the country including OK Masvingo, OK Queensdale, Bon Marché Avondale, OK Mbare and OK Chinhoyi.
OK Zimbabwe also opened two new stores – OK Banket and OKmart Chivhu- in the period under review, board chairman Herbert Nkala said in a statement accompanying the financial results.
He said: “The group will continue with its expansion plans, with a number of refurbishments and new stores scheduled for this financial year.”
In its financial results revenue grew 34.7% to ZWL$79.9bn up from ZWL$59.3bn reported in the previous year.
Profit also increased 48.9% to ZWL$2.8bn in the period under review from ZWL$1.9bn reported in prior year.
Overheads, however, grew by 37% over prior year.
Intermediated money transfer tax, staff costs, electricity charges, rentals, bank charges, depreciation were the cost lines that contributed most significantly to overheads growth.
Nkala said the increase in tax threshold had damaging effects on business as well as dampening the country’s investment prospects.
He appealed to authorities to review the thresholds as well as corporate tax which he said was unsustainable.
“The increase in the transaction thresholds had a dramatic impact on the competitiveness of the formal retail sector, driving inflation and undermining profitability and attractiveness of Zimbabwe as an investment destination,” Nkala said.
“The group continues to appeal to the authorities to reduce these transaction thresholds to create an even playing field for the retail trade which will benefit customers. An effective corporate tax rate of 34.3% is unsustainable.”
He said OK Zimbabwe was affected by delays in the settlement of foreign currency from the Reserve Bank’s foreign currency auction system, a situation which disrupted business operations, although the country’s operating environment was relatively stable compared to the prior year, largely due to the relaxation of Covid-19 restrictions.
