OK Zimbabwe – 22nd Annual General Meeting Trading Update
Operating Environment and Business Performance
- The first half of our current Financial Year (F24) has been characterised by an acute period of hyperinflation that was largely driven by exchange rate depreciation.
WBWS +10% Instore Rate 01/04/2023: ZWL$1025
WBWS +10% Instore Rate 30/09/2023: ZWL$6013
- The formal retail channel experienced very weak consumer demand during the first half. The Group operated at volumes that were severely below the business’ break even point.
F24 Q1: (21.6%)
F24 Q2: (23.9%)
YTD Sept: (22.6%)
- Rapid informalisation ensued as consumers sought to stretch their limited USD$ incomes in channels that offer parallel market exchange rates.
- Shortened trading terms from suppliers resulted in high incidences of stock outs.
- Increased operational costs from property rentals, electricity, labour, security and cleaning services.
- The Group welcomes the move by the President of the Republic to extend the multicurrency system to 2030. The certainty of the currency system will aid in renewing market confidence and assist in business planning processes.
- The Group further welcomes the Reserve Bank of Zimbabwe Monetary Policy Committee’s recommendations on removing the 10% limit on the exchange rate used by formal retailers and the removal of IMTT on bank card transactions. We await the promulgation of the necessary legal instruments to effect these positive changes.
- Macroeconomic stability will be critical in helping the Group recover lost volume base.
Key Focus Areas
- ERP Optimization is the major deliverable for the Group as it helps manage efficiencies and enhance our customer service.
- Strategic partnerships with the Shoprite Group of South Africa, Money Transfer Agencies, and Insurance Companies will be key focus areas for the second half of our financial year.
- Cost optimization initiatives across our operations, streamlining processes, renegotiating supplier contracts and implementing efficiency measures to reduce overheads.
- Acceleration of digital transformation initiatives and investment in enhancing the Group’s online presence, improving our e-commerce platform and expanding our delivery capabilities in line with changing consumer preferences.
- Building on supply chain resilience through strengthened relationships with key suppliers and diversified sourcing strategies. The Group continues to monitor global supply chain disruptions and proactively manage any potential impact on operations.
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