Finance director Ray Rambanepasi said that this was necessary for the company to generate foreign currency for restocking. He also added that the company would continue exploring opportunities for backward integration.
"We will also look at acquiring entities along the production value chain as a cost-cutting and growth strategy."
This comes as the group has taken a knock in sales value in real terms as a result of the weakening currency.
Chief executive John Koumides told the AGM that like any other business in the country volumes in the first quarter were down due to declining disposable income adding that retail had been most affected by the formalisation of local dollars as it also came with a slow-down in transactions.
He, however, added that volumes had started to recover in October. Transerv, which was down 60% in the first quarter had recovered to a 57% decrease as growth came through at the end of October into November. The group will continue to maintain its footprint across the country.
At TV Sales, the decline had reduced to 45% from 50% in the first quarter. "November had actually registered a 1% increase on last year and we are pretty sure the trajectory will continue up till December. But this all depends on what happens in terms of currency and on government bonuses."
The group is looking into increasing product offering on products that require solar energy to operate as well as increasing its footprint. A new store had been opened in Vic Falls while it had extended credit sale offerings.
DGA Zimbabwe volumes are down 31% in October but there is growth in terms of turnover in dollar terms. "The volumes in the distribution unit are not too bad when you compare other sectors in Zimbabwe" In the first quarter, DGA had reduced its imported stock component due to concomitant pricing pressure.
In Zambia, DGA volumes were down 3% in October from the 16% decline recorded in Q1. In Malawi, volumes had firmed mainly driven by the acquisition of agencies such as Blue Band, ProGroup, Pepsi and Nestle.
"Generally though regional currencies also remained weak although the Malawian Kwacha had firmed up a bit while there was a weakness in the Zambia Kwacha."
Overall, Koumides said the group was doing well. "Overheads are yet to catch up but we are sure they will and the challenge would be how you recover those overheads." Earnings are up 800% from the 700% reported in Q1 "but this could easily change in an unpredictable environment."
Given the import intensive nature of the group's operations against the current forex crunch, the currency value lost could restrict its ability to acquire working capital moving forward. On the other hand, the depressed consumer environment could lower its optimal working capital requirements. In which case, the emphasis falls on the group's capacity to control the costs of its expansive operations as well as how it structures its customer credit terms.
At the AGM, shareholders approved Directors and Auditors fees of ZWL$520,897 and ZWL$94,876 respectively.
