Powerspeed set to expand product portfolio

Fradreck Gorwe
Zimbabwe Stock Exchange listed leading supplier of electrical, hardware and home improvement products, Powerspeed Electrical Limited, mulls further expansion of product ranges to attain an impressive market share as part of the group’s plans for the future.

The decision has been informed by the fact that a diversified product portfolio helped the group in ensuring survival in a constrained operating environment and still post positive financials for the year ended September 30, 2019.

A range of products reportedly provided customers with wide choices, while at the same time helped minimise stock outs.

Power products reportedly paid off as demand for the same boosted with the obtaining erratic electricity challenges.

These paid off although the company could not meet such demand owing to supply challenges compounded by trade barriers in the name of Bureau Veritas, punitive duties payable in forex, import licenses and a dysfunctional foreign currency market among others.

Said group chairman Ebenezer Makoni in a statement accompanying the full year results;

“The main focus this past year, has been on maximising our utilisation of the existing branch network, by broadening the range of products on offer, thereby increasing the customer choice; and by optimising stock models, to minimise stock outs.

“Erratic supply of both local and imported products continued to be the greatest challenge we faced during the past 12 months. Imports were hampered by various trade barriers.

“Earlier in the year, electrical power, which had been reliably supplied, suddenly became unavailable, and power cuts of up to 18 hours a day became the norm. This triggered massive demand for alternative power products such as generators, inverters, batteries, solar panels, solar geysers.”

The group further expects to give value to the customers’ pockets going forward on the back of low disposable incomes to ensure sustainability of the hardware business.

“Understanding that financial or monetary savings rapidly waste away, the people opt to put any spare disposable incomes into their homes. We, in turn, will strive to support the people’s value preservation instincts, offering a broad range of value for money products and providing our customers with excellent service,” said Mr Makoni.

Meanwhile, the group recorded a 224,8 percent revenue jump to $267,9 million for the period under review. This was attributable among other things to an increase in inventories that in turn led “to increased sales as well as profitability.”

Inventory values increased to $267,4 million from $19,6 million, attributable to high purchasing activity. Although borrowings rose to $15,8 million from prior $8,6 million, this reportedly was “substantially reduced in real terms.”

Gross margins rose 181,5 percent to $62,1 million from $22,1 million in prior comparative period. Income attributable to shareholders increased to $17,6 million from prior $4,2 million.

Drop in profit before tax to $21 million from $5,7 million was largely driven by a 221, 3 percent upsurge in operating expenses to $49,5 million from $15,4 million in comparative period. Finance costs increased marginally from $1,12 million to $1,39 million.

Over and above, the performance was commendable;

“The group performed commendably during the year under review, given the difficult operating environment in Zimbabwe and despite increased competition. The numbers we are reporting suggest that we have been able to further increase our market share,” said Mr Makoni.

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