EDGARS Stores Ltd directors are asking shareholders to approve loans to be granted to them totalling $10 million.
he directors are also seeking the go-ahead to change the company’s issued ordinary share structure in the register.
Businessman John Mkushi, who also chairs First Banking Corporation Ltd, chairs Edgars.
Other directors include Standard Bank of Zimbabwe Ltd (Stanbic) boss Pindie Nyandoro, Raymond Mlotshwa who is group managing director, prominent lawyer Canaan Dube of Manikai, Dube and Hwacha, S D Guest, L Ferguson, S Ndlovu, Z Vella and P Mullen.
The company is expected to brief shareholders about this desire for the loans worth $10 million at an annual general meeting on June 2 in Harare.
For the period ending December 31 trading profit from continuing operations at Edgars amounted to $38 billion, while retained earnings for the year stood at $21 billion. Working capital requirements at the group consumed $36,5 billion as inflation and the need to restock drove asset growth.
Headline earnings per share grew by 610% well ahead of sales growth and clothing and footwear inflation. Stocks grew by 1019% from a very low prior year base following better than expected 2002 Christmas trading. While the Edgars chain grew by 462% the board said in light of the inflationary demands against the group’s cash resources, it had resolved to pass a dividend payment for the current year.
Chairman Mkushi said performance for the year 2004 was likely to be constrained by tight margins brought about by higher general inflation against lower inflation in the clothing, footwear and textile sector, as well as leaner stockholdings necessitated by the need to reduce borrowings in the wake of higher interest rates in the open market.
“Against this background your board is satisfied that the group’s strategies will ensure that the business remains a going concern and that it generates satisfactory earnings growth in nominal terms,” Mkushi told shareholders.