National Tyre Services Limited expects a profitable full-year after a 14 percent increase in sales for the first half of the 2018 financial year compared to same period last year and cost containment measures.
Managing director Kennedy Mandevani told shareholders that despite the difficult operating environment and competition from cheap imports and smuggled tyres, the company anticipated growth at end of the current financial year.
“We believe that if all goes according to plan, growth in sales volume will be just below 10 percent and we will achieve profitability,” he said.
During the five months to August, sales volume increased 17 percent compared to same period FY17.
Mandevani said in order to counter the current liquidity challenges, the company adopted a cash model.
“We said effective two weeks ago, all trading be cash, no more debt, so we withdrew all trading terms and by cash we mean RTGS, Ecocash, swipe and cash,” he said.
The trading environment is largely characterised by a lot of down trading and smuggling, which accounts for at least 40 percent of the market.
“We are however looking at how we can match that market in terms of supply in all market segments but we will still have our premium brands and new brands as well,” he said.
NTS opened a new branch at market square in Harare as a way of expanding the distribution network. –The Source