OK sees strong earnings growth
23/11/2011 00:00:00
by Reuters
RETAIL group OK Zimbabwe reported a 1,167 percent jump in first-half earnings, spurred by growing demand as the country's economy continued to recover from a decade-long slump.
OK Zimbabwe's basic earnings per share was 0.38 cents in the six months to end-September, compared to 0.03 cents in the same period last year, financial results released by the company on Wednesday showed.
After-tax profit was $3.9 million in the first half of the year, up from $322,000 registered during the same period of 2010. Revenue grew 61 percent to $185.6 million from $115 million previously.
Zimbabwe's retail sector is one of the fastest growing in an economy that is recovering under a coalition government formed two years ago by President Robert Mugabe and his rival Prime Minister Morgan Tsvangirai.
The economy is expected to grow for the third successive year this year, expanding by 9.3 percent, while inflation has come down to single-digits from a peak of 500 billion percent in December 2008, according to IMF figures
Labels: OK ZIMBABWE, RETAIL
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OK doubles earnings as economy mends
by Reuters
07/06/2011 00:00:00
THE country’s second-largest supermarket chain by assets, OK Zimbabwe, recorded a 153 percent increase in full-year earnings in the year through March 2011 as the country's economy recovers.
The retailer's headline earnings per share rose to 0.43 cents from 0.17 cents. Headline EPS, the main profit measure in southern Africa, strips out certain one-time items. OK said its revenue for the period amounted to $257.4 million, up from $187.5 million the previous year.
The firm said it expects demand to grow marginally as the economy mends, although Zimbabwe's high unemployment levels mean low disposable incomes.
OK recapitalised its operations at the start of the financial year with a $15 million rights issue as well as a $5 million convertible loan. The funds were used to refurbish its stores. The company said it had bought two stores from South Africa's Massmart during the period.
Zimbabwe's economy is recovering under a power-sharing government set up two years ago by long-time ruler President Robert Mugabe and his rival Morgan Tsvangirai, now prime minister, after a decade of sharply declining output and hyperinflation.
[Because of the economic sanctions/credit freeze engineered by the MDC. Reuters is owned by the same banking dynasty as Anglo-American De Beers, which stands to gain billions of dollars if the MDC would ever privatise the Zimbabwean mining industry. - MrK]
Labels: OK ZIMBABWE
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OK given green light to fire incompetent manager
Court Reporter
The Supreme Court has granted OK Zimbabwe Limited the green light to dismiss a manager who was convicted of gross incompetence and inefficiency after her branch failed to achieve monthly targets set by the supermarket chain.
Ms Sifelani Makaita Gomo, a former branch manager at one of OK’s outlets, was suspended in 2004 for under-performance. She had failed to meet her employer’s expectations for the period extending from April to August 2004, resulting in the area manager warning her.
The problem continued, prompting the company to arraign her before a disciplinary hearing in January 2005 and she was convicted of gross incompetence.
Her employment contract was eventually terminated but she immediately appealed to the Labour Court, which ruled in her favour.
However, OK appealed to the Supreme Court against the decision to reinstate Ms Gomo.
Justice Misheck Cheda found merit in the appeal and set aside the Labour Court’s decision.
In his ruling, Justice Cheda said it was clear from the facts before the court that Ms Gomo had admitted to breaching OK Zimbabwe’s code of conduct and had no basis to challenge the dismissal.
"It is clear that the Labour Court found that the appellant was incompetent. Her own admissions confirm she was inefficient in the performance of work.
"The Labour Court erred in arriving at the conclusion it did which was against what is clear on the record.
"Accordingly, the decision of the Labour Court is set aside," ruled Justice Cheda.
Justice Cheda heard the appeal with Justices Vernanda Ziyambi and Wilson Sandura who both concurred with his ruling.
In its ruling, the Labour Court had found that OK had failed to prove gross incompetence and inefficiency and quashed the decision to fire Ms Gomo.
The lower court, instead, found that the level of incompetence was not so serious as to warrant dismissal.
The court further ruled that her dismissal was unfair and ordered that she be reinstated.
Labels: LABOUR, MANAGEMENT, OK ZIMBABWE
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OK, Shoprite talks still on
Business Reporter
OK Zimbabwe Limited has indicated that negotiations with South Africa’s largest supermarket chain Shoprite, which were reported to have collapsed two weeks ago, are still ongoing.
In a statement to shareholders last week, following the news of the collapse of the deal, OK Zimbabwe said negotiations are still in progress.
"OK Zimbabwe Limited advises its shareholders that negotiations are still in progress.
"Shareholders are accordingly advised to continue exercising caution and consult their professional advisors in dealing with their shares in the company".
The South African retail giant had said they were pulling out of the R167 million deal to buy stake in OK Zimbabwe citing political reasons.
But insiders say the parties could not agree on the price for the second largest retail group in the country.
Shoprite executive director Brian Weyers had said they were no longer pursuing further investment opportunities in Zimbabwe in the short to medium term citing socio-economic and political uncertainty.
"Due to the current socio-economic and political uncertainty in Zimbabwe, Shoprite has decided not to engage in further investment opportunities in that country," he was quoted as saying.
Shoprite, which posted a 27 percent jump in profit in the year ending June, operates 102 stores in 16 countries outside of South Africa, including a grocery outlet in Bulawayo that was opened in 2005.
Shoprite said in August that it was "considering" buying businesses in Zimbabwe to expand its operations to the rest of the continent.
It has been holding behind-the-scenes negotiations with OK Zimbabwe with the intention of taking over the retailer.
The South African retailer had gone as far as sending its company executives to tour the local retailer’s branches as part of familiarising with its operations.
Whilst Shoprite continues pondering whether to invest in Zimbabwe or not another South African retail group, Pick n’ Pay, is planing to re-invest in TM Supermarkets.
The group is just waiting for a settlement in a shareholder dispute in Kingdom Meikles Ltd (KML).
Pick n’ Pay holds a 25 percent stake in TM Supermarkets, the largest retail chain in Zimbabwe.
Pick n’ Pay is said to be quite anxious to extend their investment in Zimbabwe. They want to rejuvenate the stores, starting with the equipment, but they did not want to go ahead until the KML saga was solved.
Pick n’ Pay chief executive officer Mr Nick Badminton confirmed discussing with Meikles about investing more in TM.
Labels: OK ZIMBABWE, RETAIL, SHOPRITE
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Shoprite puts R167m OK Zimbabwe deal on hold
Business Reporter
SHOPRITE, South Africa’s biggest retail chain, has put on hold a R167 million deal to buy a stake in OK Zimbabwe Limited, a move that has already been described by local analysts as having no effect on economic turnaround efforts.
Executive director Brian Weyers said in a statement that they were no longer pursuing further investment opportunities in Zimbabwe in the short to medium-term sighting socio-economic and political uncertainty.
"Due to the current socio-economic and political uncertainty in Zimbabwe, Shoprite has decided not to engage in further investment opportunities in that country," he said.
But early this month, the company had said Zimbabwe was the place to be.
Analysts yesterday said Zimbabwe was more interested in investments into production as opposed to retail. Presently Zimbabwe boasted of local retail giants such as Spar outlets, Afrofoods, Savemor, TM supermarkets and OK Zimbabwe, among others.
"Zimbabwe has more than enough retail outlets so the economy is not worried about Shoprite’s decision. What we need is real investment in production to anchor the economy," said one commentator.
South African investors have been making inroads into Zimbabwe following the formation of the inclusive Government, which has seen the country starting to regain its image as a preferred investment destination.
Shoprite, which posted a 27 percent jump in profit in the year through June, operates 102 stores in 16 countries outside of South Africa, including a grocery outlet in Bulawayo that was opened in 2000. Shoprite said in August that it was "considering" buying businesses in Zimbabwe to expand its operations to the rest of the continent.
It has been holding behind the scenes negotiations with OK Zimbabwe with the intention of taking over the retailer.
OK Zimbabwe also issued a cautionary statement advising shareholders to exercise caution and to consult their professional advisors in dealing with their shares in the company.
The South African retailer had gone as far as sending its company executives to tour the local retailer’s branches as part of familiarising with its operations.
Renaissance Capital had valued OK Zimbabwe at R334 million. The announcement by Shoprite comes at a time when the company recently announced that "Zimbabwe was a safe investment destination’’.
Its chairman Cristo Wiese had said his company would go ahead with the deal, as their investments would not be at risk.
"We are like good Africans, we are confident a solution (regarding KMAL) will be found and we believe the whole of Southern Africa will enter a new era over the next five to 10 years," Wiese was quoted as saying then.
Labels: OK ZIMBABWE, RETAIL, SHOPRITE
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Shoprite 'consider' OK Zimbabwe take-over
by Daniel Misi
31/08/2009 00:00:00
SHOPRITE Holdings would "consider" buying businesses in Zimbabwe to expand its operations in the rest of Africa, the South African retail chain said on Friday.
The company was responding to a report in Zimbabwe's state media reports that it was seeking a controlling stake in OK Zimbabwe.
OK, which has a market value of US$230.6 million (R1.8 billion), is Zimbabwe's second-biggest supermarket chain.
The Johannesburg Stock Exchange-listed company first entered Zimbabwe in November 2000 with the opening of a Shoprite outlet in Bulawayo, the only branch in the country.
Last week, OK Zimbabwe issued a statement advising shareholders to exercise caution and to consult their professional advisors in dealing with their shares in the company.
“OK Zimbabwe Limited advises its shareholders that the company has entered into negotiations which, if concluded, will have a significant impact on its business,” read part of the statement.
Shoprite already operate 16 African countries, and CEO Whitey Basson said that while he was optimistic about Africa, it is not without obstacles. While there was much money in various countries, the amount of investment capital required remained a challenge.
“People are asking ridiculous returns from investments. It’s still perceived as high risk and rentals in Africa are at least twice or more than that of South Africa and it’s dollar based,” said Basson.
Another obstacle is finding suitable sites because infrastructure is not very developed.
Africa contributes about 14% to Shoprite’s turnover, but profit growth from this sector for the year ended June was more than 50%.
Labels: OK ZIMBABWE, SHOPRITE
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Shoprite eyes controlling stake in OK Zim
By Bright Madera
SHOPRITE Holdings Limited, South Africa’s largest grocery chain, is said to have entered into negotiations with OK Zimbabwe to acquire a controlling stake in the Zimbabwe Stock Exchange-listed retail counter, Herald Business has learnt.
The Johannesburg Stock Exchange-listed company first entered Zimbabwe in November 2000 with the opening of a Shoprite outlet in Bulawayo, the only branch in the country.
Details of the deal are still sketchy, but sources close to Herald Business indicated that negotiations were still at preliminary stages.
Shoprite chief executive, Whitey Basson told South African media recently that the retail group was looking at expanding into the region.
Basson was quoted saying that the Shoprite brand was in an excellent position to expand into the African market outside South Africa.
South African investors have been making inroads into Zimbabwe following the restoration of investment confidence ushered by the inclusive Government.
Another South African grocery shop, Mr Price has already established branches in Harare following the rebound of the country’s retail sector.
This week, OK Zimbabwe issued a statement advising shareholders to exercise caution and to consult their professional advisors in dealing with their shares in the company.
"OK Zimbabwe Limited advises its shareholders that the company has entered into negotiations which, if concluded, will have a significant impact on its business," read part of the statement.
Zimbabwe’s economy has started to register positive growth after years of successive negative growth, with indications that it recorded a growth rate of 1,8 percent during the first quarter of this year.
This development has attracted a number of regional and international investors to invest in the fast growing sectors.
With the South African economy reported to have contracted for the third quarter in succession between April and June, the move could be a strategy by South Africans to flight their investment to potential Zimba-bwean operations.
Shoprite Holdings Limited is an investment holdings company that, through its subsidiaries, constitutes a fast moving consumer goods retail operation on the African continent.
In results released this week, Shoprite reported a significant rise in full year profit. Diluted headline earnings per share for the year to end in June jumped 30,9 percent to 390.8 cents in line with its own forecast of a 25-35 percent rise.
Total turnover climbed 24,5 percent to US$7,62 billion from 5,8 billion the previous year.
Its primary business is food retailing to consumers of all income levels.
The Company is organised into two main business segments: supermarkets, including fresh produce and franchise, and furniture, including insurance.
It owns and operates Shoprite, Checkers, Checkers Hyper, Usave, MediRite, OK Furniture, House & Home, Power Express, Hungry Lion, OK Foods, OK Grocer, OK MiniMark, Sentra and Value, and Megasave.
The Shoprite Group currently trades with 1 068 corporate and 275 franchise outlets in 17 countries across Africa, bringing the total number of stores in the group to 1 343.
Shoprite is in Uganda, Zambia, Nigeria, Tanzania, Mozambique, Mauritius, Malawi, Madagascar, Ghana and Angola.
The Shoprite Group started in 1979 with the purchase of a chain of eight supermarkets for R1 million.
The next 30 years were marked by various acquisitions and innovative expansion strategies that brought it to the R48 billion business that Shoprite is today.
OK Zimbabwe de-merged from Delta in September 2001 and has emerged as one of the leading retail supermarket chains in the country.
Labels: OK ZIMBABWE, RETAIL, SHOPRITE
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