Choppies Enterprise Limited has registered an increase of 22 percent in profit after tax for the six month period ended 31 December, 2017.
The financial results which were originally scheduled to be released on the 21st of March this year, were finally published this week with Choppies announcing that it has recorded a profit after tax of P67.6 million, from P55.5 million during the same period last year.
Having been cautioned by the Botswana Stock Exchange (BSE) last week for non-compliance in the publication of the financial results within the stipulated period, Choppies has explained that the delay came after the board of directors instructed management to perform more detailed procedures on verification and valuation of inventory in conjunction with the company’s external auditors, PricewaterhouseCoopers.
The process was completed during April 2018 and no material issues were identified and the additional procedures did not result in any changes to the financial results. Choppies which now operates 239 stores across eight Southern African countries opened 33 new stores during the period under review, resulting in gross profit reaching P1.1 billion, an increase of 23 percent when compared with the prior period.
The group commenced operations in Namibia and Mozambique where it has one store in each country.
Botswana, which is the largest market for the group, contributed 40 percent of revenue. Despite the subdued economic environment in the country, Choppies CEO Ramachandran Ottapathu says they managed to maintain their market share and continued to improve efficiencies.
When presenting the financial results on Friday morning, Ottapathu said revenue in Botswana increased by 5.9 percent despite aggressive store roll outs by competitors.
South Africa, another big market for Choppies where it operates a total of 88 stores also performed well after significant improvement in the North West stores resulted in revenue growth of 43 percent. “This growth has brought us to profitability in this region and we expect this trend to continue in the second half of the 2018 financial year,” Ottapathu said.
Choppies has acquired a further eight stores in the KwaZulu Natal region effective from 1 November 2017 and increased benefits of scale and other efficiencies are expected to improve further as the group expands its footprint further in the region.
The group says it continues to perform well in Zimbabwe, another big by tricky market for the group in a country characterized by challenging economic conditions. Choppies says they continue to perform better in this market, in spite of depressed economic conditions. Revenue grew by 25 percent and EBITDA by 12 percent compared to the corresponding period.
The Choppies CEO said under the new political dispensation in Zimbabwe, they expect the economy to rebound quickly. In other regions, performance is reported to have improved, but the group says it is yet achieve profitability in these markets.
During the year period, Choppies added three stores in Zambia and now the number of stores there stands at 15. By the end of the 2018 financial year, Ottapathu said the plan is to have 247 stores, from the current 239 stores across eight markets.