Sefalana Managing Director Chandra Chauhan has described the group’s financial results for the year ended 30 April, 2018 as the best ever in the history of Sefalana.
Chauhan told stakeholders early this week in Gaborone as Sefalana was announcing its financial results for the year.
Despite challenges, most of which are beyond the group’s control, Chauhan says the group has been able to deliver a solid set of results.
The group, whose core business is mainly in the fast Moving Consumer Goods (FMCG) sector, recorded profit before tax of P231.7 million, a 34 percent increase when compared with the P173.1 million profit margin recorded during the same period last year.
Chauhan is of the view that their diversification drive into the region over the last couple of years has been able to cushion the group from economic challenges experienced in Botswana. The group has in the recent past years entered into Namibia, Lesotho and recently South African market where it continues to roll-out massive footprints.
Sefalana group revenue, which reached P4.8 billion from P4.3 billion – a 12 percent increase – was as usual buoyed by Botswana operations with Sefalana Cash & Carry Limited contributing 54 percent and 23 percent of the group’s revenue and profit before tax for the year respectively.
The group says it experienced increased pressure on margins in both wholesale and retail operations as it strives to remain competitive.
Profitability for this segment is said to have fallen significantly and efforts are being made to limit the impact of these pressures as restored market conditions and improved results are expected in the coming reporting period.
At the beginning of the year, Sefalana operated a total of 51 stores before adding four more during the course of the year to make the total number of stores in Botswana 55, which include Sefalana Hyper and Sefalana Cash & Carry supermarket retail stores.
Chauhan told stakeholders that the board has advised the management to take a cautious approach in opening of new stores due to high saturation levels in the market.
Having entered the Namibian market about four years ago, Sefalana is beginning to reap profits in this market and for the period under review; operations in this market, which trade under the name Metro Namibia, contributed 32 percent and 23 percent of revenue and profit before tax for the year respectively.
Chauhan says Namibian operations continue to grow from strength to strength, making larger contribution to overall group results each year. The group has not opened new stores in Namibia, but rather shifted its focus to refurbishing and expanding existing stores.
Sefalana has been operating in Lesotho for a year and a half now and despite the somehow volatile political climate in the mountainous kingdom, the group says it has built a strong presence in the market in a very short space of time.
Sefalana achieved turnover of P388 million for the year in Lesotho, contributing 8 percent to total group revenue.
Going forward Chauhan says Sefalana, though a diversified group will continue to focus on core segments that generate strong returns for the group.
For the period under review, Sefalana board of directors led by former Vice President Ponatshego Kedikilwe has declared a dividend of 23 Thebe per share that will be paid to shareholders by end of August.