Choppies Enterprise Limited posted a 19 percent increase in revenue in the financial results for the year ended 30 June 2015. Profit after tax grew by 11 percent in the same period. Choppies revenue increased to P5.9 billion at group level while profits reached P197 million. The group CEO Ramachandran Ottapathu said on Tuesday that revenue increased due to opening of new stores across the three markets, Botswana, South Africa and Zimbabwe and attributed growth in profit to improvements that were taken during the course of the year on existing operations.
From Botswana operations Choppies posted P3.8 billion while the South African revenue increased P1.2 billion. The Zimbabwean market, though said to be facing macro-economic challenges delivered P863 million in revenue. During the period, Choppies expanded its footprint in existing markets. Locally the group added four supermarkets to total 73 stores while additional 11 stores were added in the South African market to make them 26. In Zimbabwe, Choppies took its store tally to 20, having opened additional seven stores.
Choppies has announced that it has acquired a 75 percent stake in 10 Ukwala supermarkets in May 2015. The transaction is said to be in line with the group strategy of expanding into new markets in Sub-Saharan Africa. Due to competition in Kenya, Ottapathu said they are targeting the greenfield markets in that country. The company said the finalisation of the acquisition is subject to approval by Competition authorities in Kenya and is expected to be completed by October this year. Expansion into the Kenyan market is said to be aimed at spreading the company’s risk further and also to drive the group-level sales volume growth.
Regarding their expansion plans, the company says the plans are progressing well with some few months delay in Zambia and Tanzania. The company says it plans to roll out a total of 35 new stores, excluding acquisitions in the coming financial year in line with the target to have 220 stores by the end of the 2016 calendar year.
During the year, Choppies finalised its secondary listing on the Johannesburg Stock Exchange (JSE). Ottapathu said the secondary listing on the JSE has given them impetus to become a leading retailer across the Sub-Saharan Africa.
Choppies managed to raise P448 million from the JSE listing, which according to Choppies, was used to repay P118 million in long-term debt and prop-up the cash position for further expansion.