National Tyre Services says it shrugged off stiff competition to record a 40 percent increase in net profit for the half-year ending September 30, 2012. After-tax profit surged to US$478 695 from US$336 721

in the comparable period last year on the back of an improvement in sales which saw the Zimbabwe Stock Exchange-listed counter's revenue going up 17 percent to US$8,5 million.

The group did not declare a dividend, citing the need to conserve cash while earnings per share went up to US$0,189 from US$0,133.

"An expanded distribution footprint, additional services and strength of our brands were other contributory elements," NTS said.

"Despite stiff competition in the market, margins improved slightly as a result of greater revenue contribution from value addition services."

The tyre industry is reeling from competition posed by cheap tyres, which experts have warned are of poor quality.

NTS said it expanded its operations by opening new branches in Chiredzi and Bulawayo, which also contributed to market share growth.

In the near future, NTS said the continued growth in the national fleet would continue to benefit the company.

The tyre manufacturer and retailer, however, noted that the continued liquidity crunch gripping the economy slowed down demand.

The group's total assets amounted to US$8,6 million dominated by current assets at US$4,5 million.