Wesbank

Sefalana revenue exceeds P2 billion

SHARE   |   Monday, 29 January 2018   |   By Kabelo Adamson
Sefalana revenue exceeds P2 billion

Sefalana Group has seen its revenue pass the P2 billion mark, following a 13 percent increase for the six month period ending 31 October 2017. The results, which were released this week, show that Sefalana revenue reached P2.3 billion with the bulk of it coming from Botswana operations through Sefalana Cash and Carry Limited which contributed 54 percent and 28 percent of the group’s revenue and profit before tax respectively, for the reporting period. Turnover from these operations amounted to over P1.2 billion which is in line with the previous period. The group says it experienced increased pressure on margins in both its wholesale and retail operations. Overall, profitability for this division reportedly fell by 39 percent and efforts are said to be underway to limit the impact of these pressures as the group anticipates restored market conditions and improved results in the coming six months. At the beginning of the financial year, Sefalana operated a total of 51 stores in Botswana which includes three hyper stores, 25 cash and carry stores and 23 supermarket retail stores. During the period, the group went on to open an additional Sefalana Shopper retail store in Mogoditshane and a new Sefalana Liquor store in Nkoyaphiri. The group says trading conditions in Botswana have remained difficult and have spilled into the period under review. Spending has reportedly remained significantly lower than in previous years as consumer spending continued to be cautious.


Sefalana says it continues to focus on core segments, primarily the Fast Moving Consumer Goods (FMCG) business and the group has already opened two stores in the current financial period. With the manufacturing business heavily dependent on government tenders to the extent that there have been delays in awarding of the annual tenders, the group says this has adversely impacted it. The group, however, insists that it has managed to maintain a good level of profitability at both Foods Botswana Milling and Beverages operations by growing its in-house brand product ranges. With the challenges faced in the local market, Sefalana has put its regional expansion into overdrive and diversification into neighbouring countries is said to have helped the group maintain its overall performance. According to Sefalana Managing Director, Chandra Chauhan, Namibia continues to grow and generates enhanced profitability, while Lesotho, despite its political climate, is also said to be showing positive growth. Sefalana group has also announced investments in South Africa following 18 months of working of the transaction. The group has invested R250 million in a South African consortium and will earn a fixed R50 million for five years, at which point Sefalana will have the option to convert this investment into a 30 percent equity stake in the consortium.