The Botswana Stock listed furniture retailer, Furnmart Group has indicated that its financial performance is improving following management’s decision to start closing down loss making operations.
Furnmart Group which operates 120 Furnmart stores and Home Corp stores in Botswana, South Africa, and Namibia last year failed to pay around P1 million tax and dividends to its shareholders due to lower sales of goods and declining revenues. The company stated that revenues declined by P1 million and added that profit for the year declined by around P9 million from P56 million in 2015 to P47 million in 2016, primarily as a result of higher debtors’ costs.
Furnmart management last week indicated in the financial statements for the full year ended July 2017 that following declining financials last year, the company’s financial performance is improving as revenues for the year declined by P13, 050 from P1 187 542 in 2016 to P1, 174 492 recorded in 2017, compared to around P1 million decline recorded between 2015 and 2016.
The financial statements show that the company recorded an exchange gain of P10.6 million compared to an exchange loss of P16.9 million in 2016. According to the statements, profits this year increased from P47 million in 2016 to 64.6 million. Profit after tax of P64.6 million is P16.8 million (35.2%) higher than the profits recorded in the previous year.
Furnmart board chairperson John Mynhardt stated that management is optimistic that following the difficult trading environment last year, Furnmart performance will improve further this year. He indicated that management closed the loss-making business units of Furnmart Zambia and Home Corp Upington and added that the closure and turn-around strategies implemented at the remaining non-performing stores will have a positive impact on the group’s profitability in future. “Management is confident that the new financial year will bring about a better performance, now that the loss-making business units, which had a considerable drag on the profitability of the group, have been discontinued,” said Mynhardt.
Mynhardt stated that Furnmart trading in the first couple of months of the new financial year has been encouraging. “The cost saving initiatives, considerable efforts in improving the quality of our respective debtors’ books and new customer acquisition strategies are starting to bear fruit,” he said.
The board chairperson indicated that management during the new financial year will focus on sales growth, gross margin enhancement, expense control, productivity and debtor’s management.