Choppies needs P288m for expansion 

SHARE   |   Monday, 16 October 2017   |   By Kabelo Adamson
Choppies CEO, Ramachandran Ottapathu Choppies CEO, Ramachandran Ottapathu

Choppies is planning to open 40 more stores during the 2018 financial year which will be spread across the eight countries mainly in the southern and east Africa. Choppies CEO Ramachandran Ottapathu said on Thursday that the group will need about P288 million to fund its expansion plans which will also see Choppies entering the Namibian market. Choppies intends to open three more stores in Botswana next year and another 13 in South Africa where it already has 74 stores. The retail giant currently has 217 stores and new openings are expected to take the cumulative number of stores to 252. Due to the attractive interest rate environment, Ottapathu says they intend to access the capital markets as a key funding source over the coming financial year. Two more stores will be added in Zimbabwe while four new openings will take place in Mozambique where the group says it is taking a cautious approach. Ottapathu said they are currently negotiating two sites in Tanzania; one new site will be opened in November this year to take the store footprint to four while three more are to be opened in the ensuing financial year. According to Ottapathu, Choppies will open two new stores in November later this year in the northern part of that country. During the period under review Choppies registered revenue of P8.8 billion spread across seven countries with the Botswana market contributing 46 percent to that total revenue. The contribution of Botswana operations to group revenue has declined from 61 percent which was recorded in the previous year as new regions are said to be scaling up and contributing to diversified growth. Choppies Chief Financial Officer Sanooj Pullarote said the group profitability was impacted due to a P55 million increase in depreciation charge and P21 million increase in net interest costs as well as a P10 million increase in tax charge which all led to a P30 million decrease of profit after tax. Botswana performance is said to have been affected by a reduction in realised foreign exchange gain of P31 million but the local operations were able to realise some profit from the sale of aircraft which was sold for P20 million. In Zimbabwe where the economy is going through a tough period Choppies revenue grew by 17 percent with like for like sales down by 3 percent amid extremely challenging trading conditions with shortage of cash among the challenges. The group says it has slowed down expansion in that market due to the prevailing economic conditions.

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