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Simba Makoni

Business Reporter
LISTED electrical company, Powerspeed Electrical profit after tax for the four months to January 31, 2017 jumped 200 percent compared to the same period last year.

The company increased throughput of locally manufactured goods and cut on imports and this offset foreign currency challenges and helped maintain stocks.

Revenue for the period was 10 percent above prior year as the company is on a growth trajectory through space increase of its branches.

The revenue increase was despite the fact that between October and December 2015, the company sold more solar products on the back of power cuts that were experienced during that period, which was however not a factor last year.

Managing director Mr Hilton Macklin told shareholders at the company’s annual general meeting that shortages in foreign currency had a knock on effect on the company’s quest to import products resulting in stock outs.

“To date, we have been able to work with the environment, but it has been difficult. Our strategy has been to maintain stock.

“We have been growing the business, not through increasing branch network but store space. We have also increased throughput of locally manufactured goods,” he said.

Meanwhile, management said it was working hard to improve the performance of the company so that it can be able to pay out dividends to its shareholders. The company last paid a dividend in 2002, a situation some shareholders have not taken lightly.

But management at Powerspeed contends the company has over the years been focusing on growing its business asset base through borrowings, which did not augur well with paying dividends.

“It does not make a lot of sense to borrow a pile of money then hand it out to shareholders.

“But obviously this should be a cash-generative business and as the growth rate slows we should be in a position to start paying dividends,” said Mr Macklin.

Chairman Dr Simba Makoni was optimistic the company will soon reward its shareholders and indicated the board had deliberated on the matter.

Powerspeed has grown its net asset base from around $1 million in 2009 to around $9 million currently, largely on borrowed funds.