The group bemoaned the harsh trading environment noting that their sales growth measured against the high comparable base of the prior year has been sluggish.
Commenting on the results, Tobias Mynhardt said sales growth recorded in the prior year was strong, after the lifting of the hard lockdown periods. “Gross profit margins remain under pressure and have declined compared to the prior period.
Some reprieve from the higher shipping costs and supply chain disruptions have started to filter through, but compared to the prior year, the inflationary impact of these disruptions is still prevalent,” he said.
The group’s recorded operating income has dropped by 29.7% lower than the corresponding period.
This significant decline in operating income resulted from lower margins, an increase in expenses, and higher trade receivable impairment costs. Total trade receivable impairment costs have increased significantly during the period under review, albeit off a low prior year base. “As highlighted at the interim stage, the increase in impairment cost must be seen in relation to the release of excess impairment provisions in the prior year that was increased after the hard lockdown periods.
Management believes that the impairment provision is at an adequate level,” he said. Meanwhile, the group has opened two new Furnmart stores during the period under review and is continuing with a programme of revamping old but profitable stores. “The group has been wary to expand the store-base during the last two years but will continue, albeit cautiously, to open new stores as opportunities arise.
Several new stores have been earmarked for opening in the new financial year.
Management expects trading conditions to remain uncertain due to ongoing supply chain disruptions, a high inflationary environment, and a slowing world economy.
