Edgars turnover to grow further in FY14

Published: 11 March 2014

Edgars Stores Limited will focus on cost control, more fashion, less price and a wider choice for customers to achieve profitable growth in FY14, group MD Linda Masterson told an analyst briefing today.

"Focus will be on cost control. We've identified some opportunities which will mean that our customers are going to have more fashion at less prices and a wider choice. So those are the things we believe are going to get us our growth," she noted.

Giving the FY14 targets, Masterson indicated that the group is targeting $70 million turnover, gross profit margin of at least 47.5% more than 8% trading profit margin.

She also stated that they are expecting finance costs to be more than 2.7% of turnover while PAT is set at $4.7 million.

Commenting on the retail environment, she said it is characterised by a heavily borrowed customer base, increased competition and increased number of customers with paid up accounts.

"Zimbabweans are now heavily borrowed…lending institutions are lending to every formally employed person as hard as they can, at the highest interest rates as they can and its affecting the disposable income of our customers," she noted.

On competition, Masterson indicated that "Powersales has been quite a threat to Jet" since the former is operating on a 100% import model adding that "the imports are from the far East and are very attractive in terms of price."

However, she noted that in the Edgars chain the group has increased its market share.

She said there is an increased number of customers with paid up accounts constituting 30% of the 198 000.

Edgars number of stores increased to by 2 to 26 while Jet went up to 23 stores from 16. Jet sales per square metre, as pointed out by Masterson, went down to $1 168 against last FY12's $1 333 and Edgars' marginally improved to $1 934 from 1 909.
- zfn

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