Powerspeed Electrical Limited has increased revenue by 300% to $8.6 billion from $2.1 billion recorded last year largely attributable to contributions by external customers in the retail segment.
In the Group’s financial statements for the year ended 30 September 2021, Chairman Simba Makoni said during the period under review, the company continued to focus on growing throughput and building real balance sheet value, both of which were achieved.
The retail segment contributed $8.6 billion of the total revenue with external customers bringing $8.5 billion while the engineering division contributed $111.6 million. Although revenue increased, the group incurred high costs of sales of $6.8 billion from $1.7 billion. This is a 285% increase compared to last year.
During the period under review, the group’s operating expenses increased by 391% to $1.5 billion. Resultantly, profit for the year was $154.4 million.
Makoni said the Engineering Division had a reasonable year, as it increased the volume of products manufactured for and sold by Electrosales, thus making a modest contribution to group profitability.
With effect from the end of September 2021, the division was sold to Capital Laser Engineering, a focused engineering entity, which plans to invest in, and grow the business.
The group said they will continue working with the new owners to ensure the success of the business, which will continue as an important supplier to Electrosales.
Makoni said shareholder equity grew from $1.7 billion to $2.1 billion, representing a 25.6% growth in real terms. Return on assets was 14.5%.
However, he said supply lines suffered major disruptions during the year with most local suppliers being unable to meet demand.
Furthermore, local product prices also constantly escalated, during the period under review, in response to domestic inflation and exchange rate distortions.
“Many of our foreign suppliers have increased their lead times substantially, and there have been significant increases in US Dollar prices, in line with global price increases. However, the biggest increases have been in the global cost of freight,” said Makoni.
Despite these supply line disruptions, investment in stock and systems enabled the company to make record numbers of line items available in all their stores. This contributed to the increased throughput.
On 14 December 2020, Powerspeed successfully delisted from the Zimbabwe Stock Exchange (ZSE). Since then, the group’s shares have been available on an OTC market managed by Imara Edwards Securities, where there has been active trading. Although the company is no longer listed, it remains a public company.
In November 2020, Electrosales Hardware opened its twentieth branch in the Bulawayo CBD. Additionally, the group relocated the Mutare Branch into significantly bigger and better premises, in November 2021. The market response to both these moves has been very positive.