eBusiness Weekly
HARARE – Listed electricals firm Powerspeed Electrical’s revenue for the six months to March 2018 rose 55, 3 percent to $37, 2 million on the back of growth in both customer base and throughput.
The increased throughput, resulted from an increased footprint and market share, reported management.
“We have seen an increase in throughput, which has resulted in an improved contribution from the division.
“The improved levels of business optimism and activity, particularly in mining, are steadily improving demand,” said the group in a statement accompanying the results
Resultantly, throughput and profitability in the operation grew from $888k, to $1, 4 million, and $52k to $216k, respectively.
With the increased turnover, the company was also able to lift its gross margin slightly, from 26, 3 percent to 28, 1 percent, attributable to improved sourcing.
This resulted in a 66, 1 percent increase in GP to $10, 5 million, reported management.
Operating profit amounted to $3, 3 million for the period.
During the half-year, Powerspeed’s operating expenses grew by 37, 6 percent to $7, 4 million, driven by the branch expansion program. The net result of which was a 180 percent increase in operating profit, from $1, 19 million to $3, 32 million.
Management said borrowings remain significant at $9, 9 million, as a result, finance costs increased by 39, 6 percent to $566k.
“However, given our recent investments in property and in inventory to feed the growth in throughput, we believe that this level of borrowings is less concerning than in previous years,” said the group.
Attributable profit after tax came in at just over $2 million, a significant rise from the $581k reported in the prior comparable period.
Basic earnings per share amounted to 0, 55 US cents.
“We are satisfied with the progress we have made towards our goal of establishing Electrosales Hardware as the leading brand for the retail and wholesale supply of all types of hardware and home improvement products.
“We have been expanding our range and availability of products. By purchasing high quality products at the best possible prices, we are sure that we are getting the best value for money, which we then pass on to our customers,” said management.
During the half-year, Powerspeed opened two new branches were opened in Harare. Going forward, Powerspeed says it has identified a number of opportunities for increasing its footprint in the market, and will be moving to open more branches.
“This will improve our market share in areas where it is currently weak, without negatively affecting the existing branch network,” said the group.
The board did not declare a dividend for the period under review, but maintains that this only a ‘temporary measure’ and the company is likely to declare a dividend at the end of the current financial year.
“We are very cognisant of the fact that we have not paid a dividend for many years. In this regard, we express profound gratitude to our shareholders, for their understanding and patience.
“Assuming the economic climate does not change for the worse and that the business maintains the current performance levels, we believe that the board will be in a position to consider the declaration of a dividend at the end of the current financial year.”
