New Zimbabwe (London)

6 June 2014

Zimbabwe: OK Zimbabwe Plans Survival Amid Gloomy Environment

ZIMBABWE'S liquidity crunch will worsen in the short-term and business activity is not expected to improve as consumer spending will remain constrained, OK Zimbabwe, the country's largest supermarket chain by revenue and outlets, has said.

OK Zimbabwe's CEO, Willard Zireva, said despite the gloomy outlook the company would focus on market share growth and efficient use of existing capacity as the sector will become "highly competitive".

"The company will continue in its efforts to achieve positive results and target greater share of customer spend," he said while presenting the company's financial results for the year to March 2014.

The liquidity crisis in the country has been worsening with some banks failing to meet customers' daily cash demands. Some three banks are even failing to honour customers request for cash on demand.

There is a very deep concern over the current financial crisis and there are risks of reversing economic gains made since the economy was formally dollarised in February 2009.

"We should brace ourselves for tough times ahead as the liquidity crisis is worsening. That is the reality and spending patterns are reflecting that," Zireva said.

Revenue generated got the year under review, increased marginally by 0,8 percent to US$483,7 million from US$479,6 million posted in the prior year.

Profit before taxation was 20,7 percent down at US$13,4 million from US$16,9 million in the prior year while profit after taxation decreased by 21,8 percent to US$9,7 million from 12,4 million.

Overheads increased by 6,3 percent to US$69,4 million from US$65,2 million in the previous year.

"The increase was mainly a result of increases in employee benefits as more employees were engaged to man both the new branches opened during the year and the refurbished branches in order to provide adequate service to match the improved and broadened product offering," he said.

Going forward, Zireva said the group's strategy was to maintain and grow its position as market leader. In order to enhance brand strength and improve sales growth.

"The group will embark on full-scope refurbishment work at OK Gweru, OK Mutare, OK Mbuya Nehanda and Bon Marche Chisipite.

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