Botswana Stock Exchange (BSE) listed furniture retail group, Furnmart, has announced that it will continue with new store growth in South Africa after closing its Zambia operations last year.
In its year ended July 2017 report the group recorded marginal decrease in revenue of P1.17 billion compared to P1.18 billion recorded last year. Commenting on the published results, Furnmart Managing Director, Daniel le Roux and Chairman, John Mynhardt attributed the decline to the closure of Zambia operations.
“However, excluding the discontinued operations, revenue increased, compared to the prior year. Gross profit margins were lower than last year, mainly due to the closing down of sale operations and a very competitive, subdued trading environment elsewhere,” said Mynhardt.
He said the group’s businesses in the chosen markets and territories are well positioned to take advantage of the inevitable improvement in market conditions. “Our focused management teams will continue to seek growth opportunities in the region. Management will continue with moderate new store growth, primarily in South Africa,” said Mynhardt.The company stated that the difficult trading environment was brought about by low economic growth, increased competition and high levels of consumer debt in the region. Profit after tax increased by 35 percent to P64.5 million compared to P47.7 million recorded in 2016. Operating income declined by 5.6 percent to P130.2 million due to the closing down of Zambia shops, higher operating expenses and lower finance income earned.
The group realised an exchange gain of P10.6 million compared to an exchange loss of P16.9 million last year as the Pula weakened steadily against the Rand during the financial year.
During the year the group opened four new Furnmart stores and it is now trading out of 120 stores in three countries, Botswana, South Africa and Namibia.