Share

Zim retail results reflect consumer pain

Harare - The Zimbabwean economy has continued to weaken further, at least as measured by results that were released on Thursday by four Zimbabwe Stock Exchange-listed companies.

Clothing retailer Edgars Store, owned 38.33% by South Africa’s Edcon, was one of the companies that released their interim results on Thursday.

Analysts say the retail sector is an important economic barometer as it is directly linked to the consumer’s pocket.

Analysts at Lynton Edwards Stockbrokers (LES) said the results from Edgars showed that the economy is under strain with consumers struggling to purchase, let alone service, their debts.

“While Egdars managed to grow sale of merchandise by 8.48%, the debtors book grew by a massive 19.47% reflecting that the quality of sales the Group is making is deteriorating,” said the stockbroking firm.

The number of active customers also declined to 71.3% down from 72.5%, which again points to a constrained consumer.

Saved by 12-month credit term

“The situation could have been worse had Edgars not increased their credit terms to 12 months from six months, a move that lessened the instalment burden,” said LES.

Half-year results to June 30 for cement maker Lafarge also reflected a slowdown in economic activities.

The volume of cement sales was 12% lower than the same period last year, arising from the low demand in the company’s traditional markets.

The fall in sales volumes and revenue comes despite the fact that Zimbabwe has a massive housing backlog of over a million as well as a pressing need for overall infrastructural rehabilitation and development.

The Zimbabwean government has not been able to undertake any meaningful infrastructural development as 70% of its revenue goes towards paying salaries for government workers.

Property counter Zimre Property Investments also reported results that reflected a struggling economy with voids for the half-year period to June 30, jumping to 20% from 10.92% as at December 31 2013.

Office rent per square metre came down to US$5.90 down from $7, but this did not help much as tenants still struggled to pay with rent collection levels coming down to 86% from 95% prior year comparative.

It was the same story for brick manufacturer Radar Holdings, which saw its sales volumes coming down by 9%.

“The results we saw this week reflect a deteriorating economy characterised by prevailing liquidity crunch which has severely affected disposable incomes,” said LES.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.97
-0.2%
Rand - Pound
24.09
+0.1%
Rand - Euro
20.61
-0.1%
Rand - Aus dollar
12.37
+0.4%
Rand - Yen
0.13
+0.6%
Platinum
906.50
-1.8%
Palladium
1,010.52
+0.4%
Gold
2,155.30
-0.2%
Silver
24.97
-0.3%
Brent Crude
86.89
+1.8%
Top 40
66,018
-0.4%
All Share
72,192
-0.3%
Resource 10
53,225
-0.2%
Industrial 25
99,730
-0.7%
Financial 15
16,631
+0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders