POWERSPEED Electrical Limited’s profit for the full year to September declined weighed down by rising operating costs, the company has reported.
Powerspeed’s profit declined to $465 902 from $535 000 last year over the same period as the company transformed its business into a hardware retailer.
“The 12 months to 30 September 2013 were extremely difficult as business confidence, investment and economic activity became increasingly depressed,” the group said in a statement accompanying the financial results.
“The expansion and improvement of the branch network countrywide has increased expenses, resulting in a marginal decrease in profit from operations to $1,16 million from $1,39 million.”
Operating expenses for the group went up to $7,9 million from $7,3 million over the same period last year.
Revenue for the group went down marginally to $28,6 million from $29,2 million while gross profit was up 6% to $8,7 million due to an increase in retail business.
This comes on the back of increasing competition from cheaper imports flooding the market following the introduction of multiple currencies in 2009.
“An extremely tight debtors’ policy may have negatively impacted on turnover. However, the policy helped improve cash flows and has allowed for greater investment in stocks, while reducing the cost of finance from $676 000 to $555 000,” the company said.
Basic earnings per share for the group fell to 0,12 cents during the 12-month period from 0,14 cents.
“Whereas it is not anticipated that these operations will make a significant contribution to group income under the present economic environment, they do provide strength where product customisation or backup services are required and the group will still be in a position to expand the engineering division should the conditions for manufacture in Zimbabwe improve,” the group said.
The group’s operations include Relmo, WST, Electrical Lighting Supplies, Electrosales, Industrial Electric, Electrocables and H&E Distribution and Airflo.