Edgars HY2023 Financial Results

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March 28, 2011

EDGARS Stores Limited managing director, Mrs Linda Masterson says the company is expected to roll out an additional 11 stores following improved performances by the group in 2010.

According to its financial performances for the year ending January 2011, the group posted US$1,5 million in profits attributed to an increase in sales during the festive season. Mrs Masterson said occupancy costs were 7,5 percent of turnover and an improvement would result in the group opening new stores in Marondera, Bindura, Chinhoyi and Beitbridge.

“Yes, we are looking at opening new stores in downtown Harare and rural areas through Express Mart,” she said.

Edgars Zimbabwe runs a total of 33 stores, 21 under the Edgars brand and an additional 12 under its Express Mart brand.

During the period under review, Edgars achieved US$36 million in revenue compared to US$11,1 million recorded during the same period last year. The group is excited about the future targeting US$50 million revenue for 2011 and profit before interest and tax of about 15 percent.

Mrs Masterson said during the current financial period the group is targeting finance costs of 4,5 percent of turnover and that borrowings twice covered by debtors.

During the period under review working capital was at US$14 million under high costs of borrowing. The group has however reduced the cost of borrowing from 38 percent in 2009 to about 18,2 percent in December last year before further reducing to 17 percent in February this year. Liabilities for the retail firm closed the year at US$26 million.

Analysts said Edgars results were above expectations against the background that the manufacturing sector is operating below capacity due to lack of funding.

“They have managed to make a profit despite low disposable incomes on the market, money is also expensive and they shrugged off this challenge – it was a surprise for us,” said one analyst with a local stock broking firm.

Edgars has continued to get support from its shareholders, Edcon of South Africa including a US$3 million guarantee loan. Edcon controls 40 percent of Edgars Zimbabwe. During the period under review, Edgars reduced its head count by 229 percent, paying US$500 000 in retrenchment costs. Since retrenchment is a once-off cost, meaning the company is in a better financial position. The group has also managed a 186 percent growth in accounts from 38 773 recorded in 2009 to 111 199 in January 2011.

Edgars experienced the increase in accounts following the introduction of the six months credit facility. At its peak in the 1990s, Edgars had about 270 000 accounts.

The group, which competes with Truworths, is targeting to increase its market share and productivity managing costs and working capital remains the key strategic focus.

Source: The Herald Zimbabwe (28 March, 2011)

Disclaimer: Please note that the article above has been reproduced as is from the source stated above. Edgars Stores Limited wishes to add that whilst Edcon SA is the major shareholder with 40%, the remainder of the company is owned by indigenous Zimbabweans.