Credit sales buoy Edgars turnover

Edgars MD Linda Masterson told analysts and journalists in the capital last week that the company would record turnover growth of 12% to 18% helped by the company’s rebranding strategy, which will see four retail outlets rebranded to Jet stores this year.

Nine of the 13 Express stores were rebranded by November in 2011.

Edgars is also targeting a trading profit margin increase of 15% from the US$7,5 million recorded in the financial year ended January 2012.

The group is targeting a profit after tax of US$4 million to US$4,5 million translating to an increase of between 21% and 36% by year end.

In the full year to January, Edgars posted a US$3,3 million, a growth of 54,7% from US$1,5 million recorded in the same period in 2011.

Edgars’ retail sales stood at US$51 million from US$35 million, a 44% increase from the previous year.

“Steady growth in accounts, improved merchandise assortments and improved management costs together with the successful rebranding of xpress to Jet in November ensured that targets were met,” the company said in a commentary attached to the group’s financial statements.

Credit sales contributed 76% to turnover with Edgar’s cash sales contributing 14% while Jet-Express cash sales  contributing the remaining 10%.

Earnings per share rose by 120% to US1,37 cents from 0, 62 cents in the previous year.

Group borrowings reduced marginally to US$15, 3 million from the US$15, 6 million registered in the previous year while total assets were at US$33 million rising from the US$26 million from the previous year.

Debtor’s accounts by year end increased by 43% to record a total of 158 901.

Edgars however recorded slow sales in the second half of the year.

Masterson attributed the slow business to the persistent liquidity crisis which resulted in delays in payment of salaries and bonuses in December.  

The company also suffered stiff competition from the informal sector worsened by increasing cheap imports from countries like South Africa and Asia, she said.

Edgars manufacturing business incurred a loss in the period, the company said but did not disclose the amount.

However, Edgars hopes to break in the current financial year.

“We are striving for a breakeven position in 2012 at the factory and we will continue to pursue exports despite difficulties encountered,” non executive chairman Temba Sibanda said in a statement.  

Liquidity challenges continue to hamper operations of the clothing retail sector.