TRUWORTHS Zimbabwe overturned its loss making position registering a profit after tax of $548 095 for the half year ended January 7, 2018 on the back of increased sales.
In the comparative period ended January 7, 2017 Truworths recorded a loss of $986 888.
In its financial report for the period under review, Truworths said the gross profit margin improved to 50,5% based on the increase in sales.
“The gross profit margin improved to 50,5% (2017: 38,1%) due to increased sales at full margin. Trading expenses excluding trade receivable costs decreased by 3,5%. An operating profit margin of 11,6% (2017: loss margin -20,2%) was achieved for the period,” Truworths said.
The clothing company overturned losses from its three department stores recorded in the comparative 2017 period.
For Truworths stores, the company recorded an uptick of 18,6% in its business from a loss of 40,3%, Topics a 4,3% improvement from a loss of 43% and for its Number 1 stores an improvement of 24,2% from a loss of 31,7%.
Across the board, retail merchandise sales increased by 9,3% to $7,14 million from 2017’s comparative of $6,53 million.
This was attributed to an increase in active accounts by 4,7% to 90 399 with 12 931 of these being instore credit card at period end.
This contributed to a 10,5% improvement in Truworths overall revenue to $8,6 million for the period under review from $7,78 million in the same period last year.
The net profit margin at the end of the half year was 6,36% showing that the company was in a profitable position going into the second half of its trading year.
Trading expenses were down 9,67% to $4,03 million from 2017’s comparative of $4,46 million.
At the end of the period under review, Truworths current ratio showed that the company was had more than enough to cover its current liabilities if they come due at 1,31.
Going forward, the company is relying on bonuses to be paid by government to be able to improve consumer sales,as inflation is having a negative effect on consumer spending.
“However, trading conditions should remain buoyant with bonuses to be paid by the government in the period March to June. There is a positive sentiment in the country and hope for an improved economic environment,” Truworths said.
Truworths warned that they it wasfacing shortages of foreign currency resulting in product shortages,and limiting sales growth.