OK Zimbabwe says it will maintain its capital investments at around US$12 million in the current financial year after exceeding last year’s budget by US$3 million and maintaining profitability at 20%.
By Melody Chikono
Chief executive Alex Siyavora told businessdigest on the sidelines of the company’s AGM last week that the company would look at resource capacity in capital and human terms. “On capital investments, it will work out pretty much the same levels as we have always reported at around US$10 million to US$12 million, as we continue to refurbish our stores and refreshing them. We now have the capacity and we are going to look at resources in terms of capital and people to see how much we can do in a year. We have got considerable capacity to do a good job,” he said.
OK Zimbabwe revenue for Q1 2019 rose 20% above the same period last year, as the group maintains the growth trajectory reported at its year end.
He added that the capital expenditure programme would be financed from internally-generated funds, adding that a new store will be opened in Harare later this month. Refurbishment work is expected to be carried out on a number of stores and expansion is planned in identified areas, where the group is inadequately represented.
In the prior year, capital expenditure for FY18 was U$15,5 million, up from US$10,9 million in prior year, as the group continued with its refurbishment exercise to improve existing facilities as well as expanding its trading.
The bulk of the capital was spent on the refurbishment of stores. Some of the expansion projects were mostly delayed by foreign currency shortages. As a result, the projects will be completed in the next financial year.
He added that the group plans to continue improving profitability through growing sales and managing its costs.
Siyavora said growth reported at year end F18 was continuing with performance ahead of budget.
“If the economy stabilises as has been happening and growth opportunities come along, we are likely to maintain the same levels of growth at 20%. It’s too early to say concerning turnover by fy19, but if we sustain it at current levels, it will go a long way into the initiative. We experienced erratic supply of some goods in the last three months, but the supply situation is improving and we expected to meet our sales targets for the next quarter,” he said.