A fashion retail outlet, Truworths Limited still feels the impact of Zimbabwe’s inflationary environment with the group failing to declare dividend according to the company’s Unaudited Group Results for the Half Year Ended 06 January 2019.
Prices of goods and services went up last year after the Finance Minister austerity measure to spur Zimbabwe’s stalling growth affecting inflation in the country.
“The board deemed it prudent not to declare a dividend due to the increased financing requirements in an inflationary environment,” the company says.
“Inflationary pressures will continue to erode consumer purchasing power and confidence.”
Although Zimbabwe’s business environment was negatively affected by inflation, Truworths made a gross profit of over $4,9 million a 59.0% gross profit margin improvement from 50.5% of the same period.
The group also achieved an operating profit margin of 28.8% to $2,397,119 from $1,317,759 of the same period.
“Group merchandise sales for the 26 weeks to 06 January 2019 were 16.6% higher than those of the 26 week period ended 07 January 2018 (the prior period),” Truworths reports.
“The number of active accounts increased by 2.7% over the comparative period to 92,820. 13,449 (2018: 12,931) of these were on the Instore Credit Card at period end.”
The Truworths Chairman and CEO also predict that in the short-term, shortages of foreign currency will persist.
“We will remain focused on productively managing costs and improving efficiencies,” the Group’s management says.