NTS hives off underperforming branches

14

NATIONAL Tyre Services Limited (NTS) says it has closed four branches due to underperformance and locational challenges.
The tyre distributor and retailer said it has started recording some growth and enhanced profitability after the business stalled in the previous year due to a challenging operating environment.
The group’s chief executive, Benson Samudzimu, told shareholders at the company’s annual general meeting that NTS had to rationalise operations despite lingering foreign currency shortages and power outages.
“We have closed four smaller branches due to volume performance issues and locational challenges. However, we have not lost customers as we continuously service our customers through other conventional branches without losing much sales,” he said.

“We are confident that this decision will improve the company’s profitability going forward. We are not spared, of course, by the cost pressures of the environment. So, we are going to implement vigorous saving measures across all our operations to improve profitability and competitiveness.”
While these efforts may be challenging, Samudzimu believes they are essential for the company’s “long-term success and survival. Our focus at the moment is going to be on rationalising the business, cutting costs and reviewing our various branch operations with a view to hive off those branches that are not profitable”, Samudzimu said.
“So, we will procure the fast-moving stock-keeping unit (SKU) required for the festive season and ensure that no SKU is not in stock as our customers drive into branches for systems and selling.”
He said that foreign currency exchange rate stability is critical to business planning. The country has been experiencing some stability in the exchange rate after the successful implementation of a series of measures by fiscal authorities to tame inflation and stabilise the exchange rate.
“We have now seen the cocktail of measures the government has rolled out to strengthen and promote the use of the Zimbabwe dollar, which will tell us whether the government has done enough,” he said.
In the first five months to August 2023, NTS’s overall unit performance increased by 27 percent thanks to improved stock supply.
Electricity supply challenges have, despite being stable at the beginning of the year, been lately disrupting production.