Home » Industry » Edgars Records Loss

Edgars Zimbabwe recorded a $281 000 loss in the four months to April as the operating environment tightened on the back of liquidity challenges and issues around civil servants salaries. As a result the group might post below estimate results if the economic situation does not improve. Managing director Mrs Linda Masterson told the annual general meeting yesterday in Bulawayo that sales were down 2,5 percent against last year but the amount had recovered from the 3 percent drop in the first quarter. “There was a slight recovery in sales after civil servants who make up the bulk of our customers received back dated salaries in April.

“However, if there are no changes in the macro-economic environment, our results will be below target.

At the analyst’s briefing in March, Mrs Masterson said, a focus on cost control, more fashion-less price and a wide range of choice for customers will see turnover increase just marginally (3 percent) to $70 million from $67,75 million last year. The group is targeting a $4,7 million bottomline against $4,23 million last year.

Gross margins were at 45,3 percent which Mrs Masterson said “was pretty in line with last year’s performance. The group expects the gross margins to be at 47,5 percent while trading profit is forecast to be 8 percent of turnover at the close of the financial year.

The customer base had grown to 200 000 from 197 932 at year end. Of that number, 70 percent were active. Mrs Masterson noted that the debtors’ book was in good shape although people were paying a “bit later.” Current debtors were at 73,7 percent of the book against 76,5 percent last year.

The group had extended its credit scheme to 12 months starting May. “We expect the momentum to pick up as the year progresses.”

Mrs Masterson said finance costs are 7,9 percent lower than last year and 12,3 percent below the budget.

Mrs Masterson said Jet had been affected by competition while the fact that it is not cushioned by credit sales made it prone to the difficulties in the economy.”

Source : The Herald