Sefalana Holding Company Limited this week released its financial results for the period ending October 31, 2014 with net income and earnings per share significantly higher than the past comparative period.
The company has previously cautioned shareholders to expect higher earnings. The unaudited group financial results show that Sefalana scored an overall profit before tax of P80.5 million; a 27 percent increase in profit compared to the corresponding period of October 2013.
The group – through its c chairman, Dr Ponatshego Kedikilwe and Managing Director Chandra Chauhan – says it predominantly grew its profit through continued focus on and leveraging off the core Fast Moving Consumer Goods (FMCG) business which include its first major acquisition in Namibia.
Sefalana, which has generated revenue of P1.6 billion for the six month period, representing a 32 percent growth - announced the appointment of former Vice President Kedikilwe as its new chairman in December. It has.
The group possesses one of the most diversified portfolios at the Botswana Stock Exchange (BSE), with additional segment that deal with supply of vehicles as well as a sub-segment of mechanised farming.
The manufacturing section under Foods Botswana produces among others infant food or Tsabana. This division is reported to have contributed six percent of the group’s turnover and 21 percent of group profit before tax.
Sefalana also operates a property portfolio in Botswana and Zambia which continues to perform well. Property in Zambia is fully let and generates good rental stream. This is supported by the return to the use of US Dollar in Zambia which helped reduce foreign exchange exposure to the Zambian Kwacha.
The group’s core operation of FMCG was the major contributor to both the revenue and profit before tax. Sefalana Cash and Carry or Sefcash contributed 70 percent and 45 percent of the group’s revenue and profit before tax respectively.
Sefalana has 48 stores distributed across the country which includes three hyper stores, 25 cash and carry stores as well as 18 supermarket stores known as Shoppers, three of which were opened during the reporting period.
Additionally during that period, Sefalana acquired a chain of Metro stores in Namibia. The transaction was completed on the 1st of July 2014 to take total store compliment that side to 13.
Sefalana expects the Namibian business to increase the group revenue by around P800-P900 million in the first 12 months of trading and contribute approximately P30-P35 million to profit by the financial year end.
Going forward, the group management is optimistic about the future and expects to grow the business through continued focus on core business segments.
Sefalana’s share price has from the 1st of May 2014 to January this year increased steadily to over P9.30 – an increase of about 20 percent during the 9-month period to peck Sefalana at the top of the performing shares on the BSE.
As the company celebrates the achievement of ballooning profits, shareholders have not been left behind, the directors have declared an interim gross dividend 10.00 per ordinary share.