Clothing retailer Edgars Stores has recorded a 22.3 percent jump in after-tax profit to $5.1 million for the 53 weeks to January driven by the group’s extended credit repayment facility and improved products.
The group’s customers can now repay their debts within a period of 12 months.
“Of importance was the successful management of the resultant growth in the debtor’s book. Productivity improved across the board but markdowns were high due to the need to clear aged stock,” the company said in a statement accompanying the results on Friday.
The markdowns, although they drove the top line, impacted negatively on operating profit.
Revenue grew by 12.7 percent to $73 million for the period under review due to customer centric strategic initiatives launched in the first half.
After opening four stores in the first half, no new stores were opened in the second half.
The Jet chain contributed 21.6 percent to the group’s turnover as management sought to improve pricing and product assortment.
The growth of the debtors book, according to Edgars was under control and its quality remains “good,” while debt collection costs stood at $3.7 million up from $2.7 million in the comparative period.
Total trade debtors were $33.2 million, net of an allowance for doubtful debtors of two percent.
Recoveries averaged 42.1 percent of bad debtors handed over compared to 34.6 in the prior year.
By year-end, the group had 168 763 active accounts compared to 142 796 in the previous year.
The group increased its borrowings to $20.3 million from $16.5 million last year while gearing improved marginally to 0.94 from one.
“We do not foresee a significant change in the level of gearing in the short-term as our debtors book will continue to grow,” said the company.
Going forward the group plans to, among other measures, apply tighter cost control.-The Source
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