RETAIL giant OK Zimbabwe’s gross attributable half-year profits shot up by 25,8% after revenues surged a comfortable 24,6% as the group’s ongoing investment in refurbishments and retail space growth began to pay dividends.
Report by Clive Mphambela
The group achieved net sales of US$230,8 million for the half year to September 30 2012 compared to US$185,6 million during the first half of this year. OK shrugged off a difficult economic environment as its improved facilities and product offering drove an increase in sales volumes.
OK CEO Willard Zireva said revenue growth was helped by the marked improvement in customer count and basket size as customers came back from informal markets.
“Some of our competition has been dying off, and we are slowly beginning to reap the benefits,” he said.
OK’s 25% sales growth far outstripped annual inflation which stood at 3,24% to September 2012. However, management said customers were not paying more as prices had generally remained stable during the period under review.
Profit before tax rose 25,5% to US$6,47 million, delivering attributable earnings of US$4,86 million after tax, translating into earnings per share of US$0,46 cents, a 21,1% increase over last year.
The group rewarded shareholders with a dividend payout of 20 US cents per share an increase of 33% over the 15 US cents per share dividend declared the same period last year.
The retail chain spent US$7,35 million on capital expenditure as it ramped up the modernisation of its shops.
Operations director Albert Katsande confirmed to businessdigest the refurbishment programme would continue and three more stores would be modernised before the end of the group’s financial year.
“The group has opened a new store in Victoria Falls whilst the modernisation of OK Marimba and OK Fife Avenue had also added to the retail shop space,” he said. “We are in discussion with Hwange Colliery Company to open a new store in Hwange,” Zireva said.