Edgars HY2023 Financial Results

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March 22, 2017

Edgars Stores Limited releases its 2016 abridged financial results for the period ended 8 January 2017. Below are excerpts from the results and Chairman’s Statement.

Chairman’s Statement

Depressed consumer demand for clothing together with stock movement challenges we faced in the transition period from the old system to the new Enterprise Resource Planning (ERP) solution impacted on our perfomance in 2016. Sales of merchandise for the year at $50.3m are 19% below last year ($62.3m) although collections continued to show strength…

Retail Operations

Edgars Chain: Total sales were $32.2m (2015:$42.7m). Sales per square meter were $1 467 (2015:$1 921), a drop of 24%. Edgars traded from 27 stores (2015:28). Stock cover at year end was 16.7 weeks (2015:20.2 weeks)…

Credit Management

Edgars Chain debtors were $18.7m (2015:$28m), after an allowance for credit losses of $1.8m (2015:$1.7m). Net write-offs for the period averaged 7.9% (2015:3.1%) of lagged credit sales, and 0.8% of lagged debtors (2015:0.45%)…

Manufacturing

The factory made a trading loss for the year of $0.4m. The loss was a result of reduced demand from the group retail operations. Production is being affected by the limited allocation of foreign currency to the productive sector…

Financing and cash flow

Loan repayments of $6.8m were made during the year thus reducing borrowings to $11.2m from $18m in 2015. Consequently, gearing reduced to 0.35 from 0.66 in 2015.

Outlook

The key strategic initiatives aimed at laying a solid foundation for the business to achieve profitable growth in future are largely complete. Focus in 2017 will be on growing sales through numerous activities including store improvements, marketing campaigns, staff training, improved supply chain management and merchandise assortments.

Dividend

Given the level of borrowings your company is again not able to declare a dividend this year.

Appreciation

I am grateful to board colleagues, management and staff for their dedication. I am also grateful to our customers for their loyalty and our landlords, bankers and suppliers for their continued support.

TN Sibanda
Chairman