Verimark blames rand devaluation for revenue loss - CNBC Africa

Verimark blames rand devaluation for revenue loss

Earnings

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Verimark's revenue decreases by 5.9 per cent. PHOTO: Tygervalley

The company, known for selling products via TV advertising, attributes their loss to a number of factors.

“The first half of the year has been characterised by a tough retail environment due to a weaker consumer demand, higher interest rates and negligible economic growth in South Africa,” said Verimark.

The company reported a headline loss of 3.7 million rand. Verimark also saw a loss before tax of 4.8 million rand in 2014 from a loss of 1.1 million rand in 2013.

(READ MORE: Verimark suffers due to curbed consumer spending)

In mid-February [DATA VMK: Verimark Holdings Limited] increased their selling prices due to the devaluation of the rand against the US dollar, this was the company’s second price increase in 12 months.

“Price increases were the main reason for the negative impact on the group’s sales volumes, revenue and profitability in the six months ended 31 August 2014,”said Verimark.

Despite the decrease in revenue, the company managed to maintain their gross margin percentage.

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Michael van Straaten, CEO of Verimark, says their strategy is to launch new products before the peak of the 2014 season, which they expect will improve their revenue. They are also looking to further expand their South African model into international markets.

“Verimark is one of the few products in the world today that have proven for 37 years that we can innovate and we can bring new concepts to the consumer,” said van Straaten.

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