Powerspeed Electrical records increased trading vo...

Powerspeed Electrical records increased trading volumes despite obstacles

Audrey Galawu

Powerspeed Electrical chairman, Victor Gapare said the company faced a multitude of obstacles in the previous year, including inflation, rising expenses, increased regulation, informalisation, shifting interest rates, dollarisation, exchange rate disparities, and corruption, all of which have made conducting formal business difficult.

Despite these challenges, the Group has managed to have a reasonably successful year, with an overall increase in trading volumes compared to the previous year.

Gapare said the group’s shareholder equity has grown from ZWL$158.98 billion to ZWL$269.59 billion based on historical values. In real terms, the Powerspeed Electricals achieved a 19.0% growth in net asset value per share.

“Our implementation of multiple strategies to expand our market share in various areas has yielded positive results.

“Nonetheless, we have remained focused on growing throughput and building real balance sheet value, both of which have been accomplished during the year under review.

In September 2023, Electrosales Hardware opened its twenty-second branch in Zvishavane, providing large-format hardware supplies to an area that previously did not have access to such conveniences. Although the initial throughput was slow, it has steadily increased since the branch’s opening.

“Maintaining a reliable supply of products has proven to be extremely challenging. Suppliers from China have experienced erratic supply patterns for various reasons, while power cuts in South Africa have affected many local suppliers’ ability to meet market demand. Local suppliers have also encountered significant difficulties due to the challenging business environment in Zimbabwe

“Despite these hurdles, we have continued to invest in stock and systems, improving product availability in all our stores. This enhanced product availability has undoubtedly contributed to the increase in throughput throughout the reporting period,” he said.

While interest rates have decreased, they remain excessively high. However, the lack of liquidity has been a far more significant issue, affecting both ZWL and USD borrowings and resulting in a total unavailability of capital expansion and working capital finance.

Gapare added that the company’s ability to source products from the best global suppliers allows them to deliver exceptional quality and competitive pricing to customers, a strategy which they rely on to increase their market share, even in an environment heavily influenced by informal businesses.

Accordingly, the Board declared a dividend of ZWL$17.280 per share for the 12 months ending September 30, 2023, payable to shareholders on the register as of January 8, 2024.