HARARE, July 29 (The Source) – OK Zimbabwe, the country’s biggest supermarket chain, says its operating profit for the first quarter of 2016 was up by over 100 percent above prior year as low overheads helped offset a five percent sales decline.
OK Zimbabwe had a torrid full year to March 2016, reporting an 88 percent decline in operating profit, at $1,3 million compared to $10,7 million in prior year amid growing competition chasing diminishing consumer spend.
Profit after tax and finance charges fell by a massive 91 percent to $700,000, from $7,5 million previously.
Chief executive Willard Zireva told shareholders at OK’s annual general meeting on Thursday that despite the difficult operating environment, the company wants to improve margins and keep costs down while retaining its market share.
Overheads in the period were 6,9 percent below the same period last year while shrinkage remained at previous levels.
During the quarter, the specialist departments of fruit and vegetables and in-house bakeries grew above prior year while the financial services sector operations continue to grow.
Zireva said a new agreement with Kawena of South Africa, which is awaiting approval by the South Africa Reserve Bank, will allow OK Zimbabwe to use the funds collected in SA to pay for imports and raw materials.
The company re-opened OK First Street branch after renovations that cost $1,2 million, while a new OK Mart was opened in Gweru.
Further refurbishment work is planned for Bon Marche Chisipite while two larger premises are being put up in Chipinge and Houghton Park in Harare and should be ready before the end of the 2nd quarter. Another OK Mart will be opened in Victoria Falls next month.
Zireva said while outlook for the year will be influenced by what happens to the economy, the company will remain focused on efforts to keep delivering reasonable results.