Listed clothing retailer,
The rights issue closed on
Indications from the clothing retailer are that almost all the group's shareholders took up the shares on offer.
"The group needs to be well positioned to respond with agility to opportunities and challenges that may arise to support its growth ambitions.
"The board and management are aware that strong companies will capitalise on growth opportunities whilst maintaining financial flexibility to emerge from this crisis ready for growth, hence the rights issue proceeds will be directed at enhancing growth capabilities," said chief executive officer Ms Tjeludo Ndlovu in a trading update for the second quarter to
In May, Edgars proposed a renounceable rights offer to recapitalise the business by way of a rights offer of 274 745 630 ordinary shares of nominal value of
The rights offer represented 45,66 percent of the company's enlarged share capital post the proposed rights offer.
Gross proceeds of the offer was
Edgars indicated the need to recapitalise the business in the face of economic headwinds such as foreign currency shortages, high inflation, low disposable incomes exacerbated by Covid-19, which has seen a reduction in trading hours.
Meanwhile, the group's financial services unit recorded retail turnover declined by 29 percent during the second quarter to
Resultantly, the debtors book was down to
Interest income grew 53 percent year-on-year in inflation adjusted terms in response to increased funding and operating costs.
According to the group, active accounts deteriorated progressively from an average of 50,5 percent of total number of accounts during the first quarter to 40,7 percent as at the close of June trading month.
Enhanced education on electronic payments by customers continued improvements in debtors collections.
Said Ndlovu: "Debtors collections were above expectation, strong in the months of May and June as customers began account payments in our stores as well as improved customer education on electronic and other alternative payment channels availed to them.
"Average monthly collections for the second quarter were 28,1 percent compared to 23,3 percent last year."
The quality of the book was badly affected during March and April due to Covid-19 lockdown, resulting in increased expected credit loss provision for the quarter.
"Rehabilitation of the debtors book has been impressive. In
The group's micro-finance unit's loan book declined 92 percent to
The closure of schools due to Covid-19 resulted in low disbursements and management is exploring alternative sources of business to grow the book.
As at end of April trading month, the arrears book was 58,8 percent and 30 day plus arrears book was 29,8 percent of the loan book. Ms
Ndlovu, however, indicated the book has since improved significantly with total arrears now at 22,1 percent and at 9,2 percent of the loan book as at the end of June trading period.
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