We have extracted the financial summary from the 2018 annual report of Edgars Stores Limited listed on the Zimbabwe Stock Exchange under the share code EDGR.zw. Edgars is fashion retail company operating three divisions: Edgars Chain, Jet Chain and Manufacturing.
The following is an excerpt from the 2018 Annual Report:
Foreign currency shortages necessitated an import substitution program which, through the efforts of our sourcing teams, was largely successful. Despite these endeavors, local production was somewhat erratic due to the inability of our suppliers to source inputs. Imported product lines which could not be sourced locally such as cosmetics, shoes and lingerie, were more severely affected.
Despite the difficulties, trading conditions during the first 9 months of the year were good.
Mark-up action to protect stock-outs was necessitated in October when fears of a return to hyperinflation left customers frantically seeking value. Our prices did not go up by as much as some but still had the effect of dampening demand and reducing volumes. Edgars and Jet chain unit sales for the last quarter declined by 37% and 33%, respectively. Being our strongest quarter, (including the festive season) this had a negative impact on annual volumes.
While we could have achieved a better top line with improved assortments of imported lines, this proved impossible due to the constraints mentioned above, and Group revenue grew by 22% on last year to $78.1million (2017; $64.1m). Group retail unit sales declined by 11.4% for the year.
Profit for the period of $8.5m was 114% higher than the prior year ($3.98m) partly due to increased margins in the last quarter. Group margin improved to 46% (2017:43%). In November our two Kadoma stores, which premises were under lease, were destroyed by fire. Efforts are underway to reinstate both operations.
OUTLOOK AND STRATEGY
In the short term, we look forward to customer incomes being assisted somewhat by salary increases. In the longer term we look forward to the promised fiscal discipline and reforms delivering foreign investment and job creation. We will intensify our efforts in working with local suppliers to develop and improve the quality, fashionability and, importantly, on- time-delivery of wanted product.
Edgars Stores Limited is a Company Member of AfricanFinancials.com.