Retail news. Semester 1 of 2014 table of contents

10 Responses to OK records $12,4m after-tax profit

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Delmar Davis Mackomber June 14, 2013 at 8:26 am

Good results but i would appreciate if you’d fairly draw winners for your Challenge grand price.Why have two urns ,instead of proceeding with the single big one where your other car prizes were drawn?Whose coupons were in these small urns?

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zvazviri June 14, 2013 at 8:47 am

Gud for them and their employees.I think its more to do with a happy committed workforce.Your rival supermarket is neglecting vashandi vari kuunza mari and in the end a disgruntled lot is never expected to rise up to the challenge.Kutadza kubhadhara overtime as stipulated by labour laws…It is a pity

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Mwalimu June 14, 2013 at 8:52 am

4. 
   
   

sly June 14, 2013 at 9:21 am

yeah they should continue selling cheap s.a products otherwise wakada kutedzera zvana kasukuwere zvekuti hanzi tengesai zvinhu zvemuno chete zvinodhura tinozviendera ku s.a nekyu botwana tondozvitengera tega

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Bruno June 14, 2013 at 10:32 am

Makamboonawo here tsvina iri mumashoko a OK. To say the truth OK Zimbabwe should do something about the state of their shops. Have you also noticed how they change Till operators. With these profits OK should be doing better than this.

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Norest June 14, 2013 at 10:35 am

It is true OK shops are very dirty!!! People only rush there for the grand challenge. Queue management is poor. Customer service at till points also poor.

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tafy June 14, 2013 at 10:38 am

Hongu mari yavapo tazviona kongatichiincreaser job security yevashandi by making them permanent employees. Its a shame to note that more than 50 percent of yo employees are on contract bases, and most of them for more than three years

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Warl June 14, 2013 at 7:04 pm

Asi OK is by far much better than TM patsvina.

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babaprince June 14, 2013 at 8:07 pm

pay your workforce

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Mudukuruso June 15, 2013 at 11:33 am

Ini ndiri mushandi kwaOK, its a pity that OK is nice from afar but far from nice. Outsiders see a different OK than what we see from within. Good profits are posted at the expense of employees – we are overworked and underpaid, job security is non-existent, autocratic leadership style prevails, and top management take advantage of the job market as the “take it-or-leave-it” mindset rules.

But in all this madness, I sense the wind of change. This regime will surely collapse one of these days!

OK targets regional markets [Daily News]. Saturday, 15 June 2013

HARARE - Zimbabwe Stock Exchange-listed retailer OK Zimbabwe Limited (OK) said it will soon be expanding operations into the region as a way of boosting earnings and consolidating its foothold on the African continent.

Willard Zireva, OK chief executive told analysts at the company’s full year results  briefing that the retail giant has set its eyes on setting up a thriving business venture in the region. “We are looking at funding our regional expansion initiatives from a combination of internally generated funds or borrowing locally,” he said without divulging the identity of the potential markets.

OK’s revenue in the full year to March 31 grew by 16,3 percent to $479, 6 million from $412,6 million in prior year. Profit before tax stood at $16,9 million from $15 million while profit after tax grew by 20,1 percent to $12,4 million from $10,3 million.

Overheads increased by 19,2 percent to $65,2 million from $54,7 million in the previous year.

“The increase in overheads was mainly a result of increases in employees benefits as more employees were engaged to man both the new branch opened during the year and the refurbishment of branches in order to provide adequate service in the improved facilities with broadened product offering,” said Zireva.

Capital expenditure was $12, 1 million, up from $11, 5 million in the prior year mainly as a result of store refurbishments and replacement of plant and equipment.

The cost of borrowing increased from $400 000 in prior year to $800 000 in the period under review while a $5 million convertible loan from Investec Africa Frontier Private Equity Fund (IAFPEF) translated to about seven percent shareholding in OK.

Zireva said that after obtaining a money transfer licence there has been positive development as the company continues to expand financial services products to improve this line of business.

“We are still building up in this line of business. I can confirm that for the first four months up to May the money transfer services contributed over $80 000, our target is to make it to a least $1 million,” said Zireva.

The group said imports continued to dominate products sold in their stores as local manufacturing remained depressed.

Going forward, the retailer said that despite diminishing disposable incomes they would continue competing fiercely through experience and building strong brands.

A final dividend of 40 cents per share was declared in the period under review, bringing the total dividend for the year to 60 cents a share, an increase of 20 percent over prior year. - Kudzai Chawafambira

Retailers still reliant on SA for supplies: OK

Sunday, 16 June 2013 00:00 [Sunday Mail]

Business Reporter South Africa remains Zimbabwe’s biggest source of retail products, highlighting a severely constrained local manufacturing base and increased vulnerability of local prices to the exchange rate between the South African rand and the United States dollar, OK Zimbabwe Limited has said. However, the retailer emphasises that it continues to actively source products from the local market. Though the economy has recovered from a decade-old slump before 2009, the productive sectors of the economy continue to face huge challenges in sourcing funds to recapitalise.  “The Group continued to import most of its products sold in the stores as supplies from the local manufacturing base remained inadequate. South Africa subsists as the major source of imported products and prices of goods were generally stable with minimum movement to the rand/US$ exchange rate.  “While it was necessary to import goods, the Group recognises the need for and continues to support local industries’ revival and the consequent generation of employment,” said OK Zimbabwe in a statement accompanying its financials for the year ended March 31, 2013.  The Confederation of Zimbabwe Industries (CZI), which represents the country’s major businesses, says more than 60 percent of goods on local supermarket shelves are imported, the bulk of which are from neighbouring South Africa.  A negative current account is now presenting a real challenge for policymakers as the country’s imports continue to outstrip exports.  First-quarter statistics from ZimStats show that the country’s trade deficit widened to US$846 million as exports at US$814 million were more than half the figure of imports at US$1,7 billion. Relying on imports did not, however, influence prices at the giant retailer.  Goods and services were relatively stable in the review period. Revenues climbed 16 percent to US$480 million from US$412 million a year ago, while profit for the year rose 20,1 percent to US$12,4 million despite shrinking disposable incomes and a largely illiquid market.  During the current financial year, OK Zimbabwe plans to continue refurbishing its existing branches and re-opening new ones. Two new branches are planned in Chitungwiza and Hwange, while Bon Marche Eastlea “will be moved to larger premises”. Also, refurbishment work is planned at OK Waterfalls, OK Houghton Park and OK Bindura. But as the retailers continue to grow so, too, has its costs. Overheads in the period rose 19 percent to US$65 million owing to increased insurance costs and related operational expenses.  “Insurance costs also increased significantly due to growth in asset values and the insurance excess paid under the fire claim. Costs incurred in moving products to the branches increased products. The cost of borrowing increased to US$0,8 million from US$0,5 million in the prior year as the convertible loan from Investec Africa Frontier Private Equity Fund (IAFPEF) and other bank facilities were accessed during the year,” explained OK Zimbabwe.  South Africa’s Investec Africa Frontier Private Equity Fund acquired a 7 percent equity in OK Zimbabwe in 2010. The Fund, an arm of Investec Asset Management, snatched up 29,6 percent of OK’s US$15 million rights offer, which received a 70,4 percent shareholder support. IAFPEF also agreed to a US$5 million loan facility with option to convert it to ordinary shares at agreed dates.