OK Zimbabwe trading update: 28 July 2011
The company achieved revenue of $89.0 million against a budget of $82.5 million in the first quarter of F12, representing growth of 59.8% over prior year. OK Mart contributed 8.3% to this revenue. Like for like growth in sales was 46.5% while overheads are up 51% including OKMart and 40.3% excluding OKMart. Gross profit margin has been maintained at 17.9% for the supermarkets (17.7% inc. OKMart) against 17.8% achieved last financial year. Efforts continue to improve the profit margins through better sourcing and improved participation of higher margin products. We anticipate continued good growth to half year.
Controls over shrinkage have continued to improve with the result that the stock losses are lower than the company target of 1.0%. This contributes to improve the profitability of the company which has grown by over 500% on prior year. The OK Mart operation is currently breaking even, but the outlook is improved profitability from July.
The capital expenditure programme is continuing with funding from the capital raised in the last financial period as well as cash generated from operations. A new Bon Marche’ store will be opened shortly in Westgate Shopping Mall. Bon Marche’ Mount Pleasant will have been refurbished by the end of 2011. Three other stores are on plan for major refurbishment before the end of the financial year. Limited refurbishment work will also be carried out in four other major outlets. The delivery fleet has been increased to improve distribution to outlets from the central warehouse, while Information Technology equipment replacement and enhancement is under way to ensure a reliable network for the trade and systems to manage business information.
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OK Zimbabwe Limited (OKZ.zw)Share price: 6,999.55 ZWL cents ▲ (250.14 | 3.71% – 22/03/23)
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