FurMart, the country?s largest furniture store, sat its investors in comfortable laurels as its six months revenue surged up by 35 percent to P128 million, burying the initial bumpy period of regional expansion.
According to the six months financial statement December 31, 2006 revenue was up to P 127.6 million against P 94.8 during a similar period last year. Income after tax was 10 percent better at P 12.5 million from P 11.4 million during the same period in the yester-year.
The move was cheered by African Alliance analyst, Pulafela Isaacs, who said his company is confident that FurnMart would deliver on its promised targets.
?We remain confident that management will achieve their growth targets. Inflation in South Africa, where the expansion is geared, is relatively low and indicates a positive outlook for the credit business,? he said in his research note.
Furnmart now has about 70 outlets in the three countries of Botswana, Namibia and South Africa.
The Botswana company took a conscious decision a few years back to invade the remote northern areas of South Africa as part of taking back the challenge to former foes who retreated at the beginning of the century.
The company, which is headed by one of the top three richest men in the country, John Mynhardt, is operating along the Limpopo and Northwest provinces under the flagship Xtreme Discount.
?Two new Xtreme stores were opened during the last six months, bringing the total to nine stores. They are all trading satisfactorily and in line with budget estimates,? the company said in a statement.
As part of the larger scheme of things it also opened HomeCorp stores in Botswana and Namibia to entrench its market dominance. Its entrance in Namibia has seen a number of South African furniture stores fleeing the country.
?The three-legged growth strategy that was addressed in our last report entitled ?Chain reaction -15 January 2007? is now in place.
?Two new Xtreme stores were opened in South Africa, as well as HomeCorps stores in Botswana and Namibia, respectively. Operationally, senior management posts were created and subsequently filled by specialized and experienced staff,? Isaacs said.
He added: ?These and other planned stores are expected to drive revenue in the medium to long term.?
However, he said, the Botswana trading environment is still challenging due to increased competition and pressure added by the expansion programme that has hit on the earning margins but said it would be short-lived.
It announced a dividend of 9.07 thebe per share and the market supported it to 750 thebe per share during last week.