Electrical products supplier, Powerspeed Electrical Limited, trading through its chain of hardware retail outlets known as Electrosales Hardware, has indicated it is on a recovery path following its reopening after the easing of lockdown restrictions.
During the initial 21-day national lockdown to curb the spread of COVID-19, which came into effect on March 30, businesses not providing essential services remained closed.
Zimbabwe is currently is under Level two lockdown under which all businesses, save for the informal sector are allowed to operate.
In the latest trading update, Powerspeed said they were beginning to pick up after operations were completely closed for a good part of April resulting in the company incurring substantial losses.
“We have subsequently re-opened, and although volumes have not recovered to where they were before the shutdown, they have bounced back surprisingly well,” said the company. “Supply lines have been disrupted, but are steadily re-opening and recovering.”
Powerspeed added: “In the meantime, our substantial buffer stocks have been able to satisfy the reinstated demand. It is still too early to be definitive, but it does appear that volumes have already recovered sufficiently to return us to profitability.”
The company said it was clear that the Zimbabwean economy would shrink again in 2020, and that two significant sources of income for their customers, being diaspora remittances and tourism, will be significantly constrained.
“Despite this, we believe that we are well placed to continue our march to growing market share, and thereby grow shareholder value,” said Powerspeed.
“We have, for some time, been concerned about competition from the informal sector, which has been thriving in Zimbabwe. Enforcement of COVID-19 hygiene regulations has compelled authorities to keep informal markets closed, and demolish structures in some of those markets. We shall be monitoring the impact of these actions, with a view to measuring the scale of competition from the informal sector.”
Given the immediate uncertainty, both in Zimbabwe and internationally, the company said, the board had considered it prudent not to declare a dividend for the half year ended 31 March 2020.
“However, we are optimistic that we should be in a position to, once again, declare a dividend at the end of this financial year.