HARARE, June 2 (The Source) – Electrical goods manufacturer and retailer, Powerspeed’s net income for the interim period to March more than doubled to $580,673 from $161,595 recorded in the comparable period last year on increased revenue and cost containment measures.
Turnover was up 13 percent to $24 million compared to $21 million recorded in the same period in the prior year.
Gross profit increased by three percent to $6,3 million from $6,1 million achieved in the comparable period previous year.
However gross margin fell from 27,6 percent to 26,3 percent as the group continued to expand into lower margin products.
According to a statement of the financials, borrowings increased 23,69 percent to $5,98 million compared to $4,84 million in prior year but the company was able to negotiate lower interest rates.
The company however said operating expenses were five percent lower at $5,3 million as a result of the cost reduction measures. This produced a 78 percent increase in operating profit to $1,187 million from $667,000.
On trading, the group said it is satisfied with establishing the Electrosales Hardware as the leading brand for retail and wholesale supply of all types of hardware and home improvement products.
However, it said current economic difficulties were limiting consumer spending and as a result affecting throughput in the stores.
“To counter this, resources are being channeled into improving our reach into lower income end of the market and to expanding our product offering to cater to this market,” it said.
Reduced activity in agriculture, construction, manufacturing and mining is limiting prospects of the Engineering division, although demand remains, due to the difficulties associated with importing.
“We are seeing growth in throughput, which has substantially improved the division’s position from a loss making unit to a positive contributor.”
Going forward, the company will seek to expand its Electrosales retail brand.