Shareholders of the listed regional retail furniture group, Furnmart would be disappointed to learn that the company management has decided not to declare a dividend for the ended financial year. After delaying its financial results for a while as it was preparing to wind up Zambian operations, Furnmart has this week published its financial results showing a decline in earnings. Furnmart management says subsequent to the impairment of the investment in Zambia, the Company intends to build up reserves in order to resume dividend payments at the next interim reporting stage. The closure of the Zambian operations which commenced on the 1st of this month is expected to boost the company’s profitability in the future. The group has seen its revenue decline by 2.4 percent against last year, registering P1.2 billion for the year under review which came to conclusion at the end of July.
Furnmart which also operates Home Corp stores said in a statement that the decline was the result of lower merchandise sales, caused in the main by stronger Pula. “Positive sales growth in all countries, with the exception of Botswana, was negated on consolidation. Operating income of P137.9m was 6.1% lower due to higher total debtors’ costs,” the group said in statement accompanying the financial results. The furniture company which sells most of its products on credit said the quality of the debtors’ book in the group has been maintained; however job losses in Botswana due to closure of some mines together with the group’s decision to exit Zambia has necessitated an increase in the provisions for doubtful debt. Furnmart has for the year under review opened five new stores while continuing to revamp the old but profitable stores but going forward says it will continue with moderate new store growth in the region. “Management anticipates that trading conditions are likely to remain subdued for the foreseeable future. However, early signs of improvement on the credit side of the business are emerging,” Furnmart said, adding that it will also continue to focus on improving gross margins, productivity and efficiencies and containing costs.