Botswana Stock Exchange listed furniture shop, FurnMart recorded 89.3 percent decline win profits in its half year ended January.
The profits were materially affected by the weakening of currencies in South Africa and Namibia. The group recorded P4. 4 million profits compared to P40 million recorded in the same period last year. Revenue amounted to P 6222.2 million, a decrease of five percent while the operating income of P75 .1 million was 1.3 percent lower than the prior period. Commenting on the published results, Furnmart Chairman, John Mynhardt said the difficult trading conditions in the region and the currency fluctuations have had an impact on the results with South African credit environment remaining a challenge.
“The exchange loss of P45.2 million compares to an exchange profit of P3.9 million in the previous year. The exchange loss was caused by the weakening of the group’s, other functional currencies during the period under review,” said Mynhardt. He said the gross profit margins were maintained for the period under review despite difficult trading conditions, higher product inflation and currency weakness. “Operating expenses were in line with the previous year.
The quality of the debtors’ books on the whole has been maintained,” said Mynhardt adding that the impairment provisions have remained at similar levels. He said the shifting landscape in South Africa with regard to the furniture industry and the regulatory environment around consumer credit is closely monitored and the group remains well positioned to respond to the changes.
The group expects the trading environment to remain similar during the remainder of the 2016 financial period as consumers come under further pressure from rising inflation, slow economic growth, job losses and interest rates increases. Mynhardt said the material weakening of the Zambian Kwacha is a concern. However he said the group will continue to trade cautiously in Zambia. Furnmart, through its Home Corp store has operations in Botswana, Zambia and Namibia with a distribution centre in South Africa.