Furnmart has decided to close down its operations in Zambia following poor performance in that country.
The Zambian economy has been under duress following the fall in commodity prices, which affected the price of copper, its principal export. The decision by management of Furnmart to close down the Zambian operations comes as little surprise as the Botswana based company has had concerns about its future in Zambia.
“Management would like to bring to the attention of shareholders that the publication of abridged audited consolidated financial statements will be delayed in view of the decision to wind up operations in Zambia which is having an impact on the finalisation of the results. The Company commenced the winding up of the Zambian operations on the 1st November 2016.
Management is confident that this will have a positive impact on future profitability,” said Tobias Louis John Mynhardt, the group’s deputy chairman and also the Managing Director of Cash Bazaar Holdings.
The decision to close down the Zambian operations follows an earlier cautionary statement which was issued by Mr. Mynhardt to the effect that the company’s profit after tax for the twelve months ended 31 July 2016 is expected to be more than ten percent (10.0%) lower than the corresponding period ended 31 July 2015. Furthermore, the group’s performance for the financial year ended 31 July 2015 recorded profit before tax which was 18.6% lower than the prior year mainly as a result of lower gross profit margins and higher operating expenses. In the latest financials released this year, the interim results showed that profit before tax was 89.3% lower than the previous corresponding period.
The group’s loss in the interim results ending 31 January 2016 was materially impacted by the weakening of the currencies in the region, outside of Botswana. This had an impact on revenue, trading results and the valuation of the group’s intercompany receivables and investments. The group’s performance was weighed down by the exchange loss of P45.2m compared to an exchange profit of P3.9m in the previous year.
The group said the exchange loss was caused by the weakening of the group’s other functional currencies in the past 6 months and added that this illustrated the material impact that the weakening of these currencies has had on the results.
“The difficult trading conditions in the region and the currency fluctuations have had an impact on these results. However, management believes that the fundamentals of our respective business units are sound and that these businesses are well positioned to take advantage of future economic improvement. The Zambian business unit remains a challenge. The Group’s Home Corp model in South Africa also requires refinement,” the group said in a management analysis accompanying the interim results.
Still on the same management analysis, the group said it will continue to trade cautiously in Zambia citing concerns about the material weakening of the Zambian Kwacha during the period under review. Prior to the interim results, the group had raised similar concerns in its 2015 annual report, highlighting that the kwacha has weakened substantially against the pula, and it was revealed then that the management is closely focussing on and monitoring the Home Corp and Zambian business models to ensure that these investments yield the required return. However it would appear the management finally decided to pull the plug after the situation failed to improve in Zambia.
Furnmart Limited retails domestic furniture and electrical appliances through its network of stores in Botswana, South Africa, Namibia and Zambia. The group is made up of 1005 shareholding in the following subsidiaries: Furn Mart (Proprietary) Limited (Namibia), Xtreme Discounters (Proprietary) Limited (South Africa), Furniture Mart Zambia Limited, Furniture Mart (Proprietary) Limited (Botswana) and Furnmart (Proprietary) Limited which is a distribution company registered in South Africa.
Furnmart which is listed in the Botswana Stock Exchange BSE) has also seen its performance in the stock market taking a hit. In 2015, the share price was down by as much as 48%. The situation did not improve this year as the company has so far shed off 22% to trade at 0.85t. The company has 606 446 080 issued shares, and in 2014 only 0.35% of the total issued shares was traded. This slightly improved in 2015 when the number of shares traded as percentage to the total issued shares went up by 1.13%. In 2015, the listed company had 481 shareholders comprising of 34 body corporate, 57 Insurance companies and pension and provident funds as well as 390 individuals. The public accounts for 59.04% shareholding while Director’s interest stand at 40.96%.
Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.
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Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.
The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.
Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.
“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.
He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.
Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.
“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.
He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.
He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc
“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran
Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.
“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.
Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that the BIE provides a fertile environment where they can meet, share ideas and grow professionally.
“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.
He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.
“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams
He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .
Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.
“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.