Furniture retail shop, Furnmart says trading environment is increasingly challenging as regulatory bodies introduce more restrictive laws and limitations in an attempt to protect consumers from high level of indebtedness.
In its 2017 annual report, Furnmart Group Chairman, John Mynhardt pointed out that the regulatory environment for consumer credit providers is becoming increasingly challenging and complex as regulatory bodies introduce more restrictive laws, regulations and limitations in an attempt to protect consumers from high levels of indebtedness or exploitation by credit providers.
He said changes and developments in this regard are closely monitored across all countries where the Group operates, and where necessary, adjustments are made to the respective business models. “The Group will continue to be a good corporate citizen and we intend to abide by all laws and regulations, in all geographical areas.” he said.
Last year the company closed some of the loss-making business units of Furnmart Zambia and Home Corp Upington. In its half year ended January 2018, the group recorded an increase in profit after tax of 164 percent to P62.5 million. Mynyardt explained that the furniture retail industry continues to consolidate, particularly in South Africa where store closures occurred across the board. “As a result, to maintain growth, the South African furniture retailers maintained their expansion drives into Africa and are becoming more competitive in the territories where the group traditionally dominated.” he said.
During the reporting period last year, the company saw total debtors’ costs reduced due to an improvement in collections and an improvement in the quality of the book value while revenue increased by 5.8 percent to P660m compared to the previous year. The Group opened four (4) new Furnmart stores during 2017 reporting period and is now trading out of 124 stores in three countries.
Mynyardt also highlighted that trading subsequent to financial year-end has been encouraging as the cost saving initiatives, considerable efforts in improving the quality of debtors’ books and new customer acquisition strategies are starting to bear fruit.
“The Group’s businesses in our chosen markets and territories are well positioned to take advantage of the inevitable improvement in market conditions. Our focussed management teams will continue to seek growth opportunities in the region. New store growth will come primarily out of South Africa.” he said.