• A 46 percent jump
• Namibian operations generate P800 m
• Share price up 80% in 12 months
Sefalana Group, which is currently on an aggressive expansion path, has announced an overall profit of P191.1 million driven mainly by the core business of Fast Moving Consumer Goods (FMCG) for the year ending April 30, 2015. When presenting the group financial results on Friday, Sefalana Managing Director Chandra Chauhan said the group had a fruitful year in all fronts. Sefalana is one of the most diversified companies at the Botswana Stock Exchange (BSE) with trading in segments including consumer goods, manufacturing, properties and trading in commercial motors and mechanised farming.
Sefalana’s revenue for the year reached P3.5 billion, an increase of 46 percent from the previous year was mainly driven by the consumer goods trading segment with Sefalana Cash and Carry Limited contributing 65 percent and 47 percent of the group’s revenue and profit before tax for the year respectively.
During the period, the group had under its operation a total of 20 retail outlets with 48 stores across the country including cash and carry stores, 18 supermarket retail stores known as Sefalana Shopper and three hyper stores. The group has since opened its first Quick Store in Mogoditshane in June.
Chauhan on Friday praised their Namibian operations which commenced following the acquisition of Metro chain consisting of 12 stores, increasing Sefalana store compliment to 13. He said the Namibian market has performed well for the group.
The Namibian business made a significant contribution of over P800 million to the group’s turnover which Chauhan described as a major milestone mainly that it is the first year since the acquisition. Sefalana expects to open additional stores in the Namibian market as it looks to extract value from the market.
With regards to the manufacturing sector, Chauhan said lack of gaps in government tenders was of great benefit to the Foods Botswana which produces Tsabana and Malutu. He said having had this year declared a drought year; expectation is that government will double procurement of the food rations which will further improve the performance of Foods Botswana and the manufacturing segment as a whole.
Sefalana also moved to put more emphasis on developing and selling products to non-government bodies and individuals in an attempt to reduce dependence on the large contract, something which it has been said has been successful. During the period under review, Sefalana acquired a UHT milk plant from Delta Dairies after the company was placed under liquidation and also acquired a fruit juice plant previously owned by Golden Fruit Juice. The two plants are expected to boost Sefalana in the FMCG section as it strives to start producing in-house products. Chauhan revealed that the intention is to relocate the fruit juice plant currently based in Ramotswa to Gaborone.
He said they are in the process of being the first to introduce online shopping in Botswana to improve customer experience. Foods Botswana has in the period under review contributed five percent to the group’s turnover and 16 percent (30.5 million) of group profit before tax. Sefalana, whose market capitalisation currently stands at P2.7 billion, is currently undergoing a rebranding exercise which is expected to take nine months to complete. The process involves consolidating all the group subsidiaries under one brand. By Friday the group’s share price was trading at 1250 Thebe share having increased by 80 percent in a 12 month period from the Rights Issue Price of 695 Thebe in July 2014.