BOTSWANA – The restructuring strategies put in place by Botswana retailer Choppies, continue to bare fruits as the company reported a triple digit growth in its full year profit for the period ended June 2022.
The retailer registered a 141% growth in profit from BWP 60m (US$4.4m) attained the previous corresponding period to BWP 145m (US$10.8m).
The stellar bottom-line performance was a reflection of high sales attained during the period, rising by 13.3% to BWP 6.042 billion (US$451m), driven by seven new stores coupled with strong volume and price growth in the Rest of Africa. The group’s like-for-like sales growth was 10.2%.
Choppies’ continuous realization of profitability follows a number of drastic steps taken by the company to streamline its operations by ceding unprofitable assets in South Africa, Tanzania, Mozambique and Kenya while also improving its governance structure.
Other than operating in its home market Botswana, the company continues to run operations in its neighbouring Southern African countries i.e., Namibia, Zambia and Zimbabwe.
According to the financial reports, in spite of the challenging trading conditions, Botswana continued to show a modest sales growth with gross profit growing by 9.9% to BWP 1.307 billion (US$97.5m).
Meanwhile, its Gross Profit margin declined due to higher-than-expected supply chain costs, including fuel and managing prices due to higher cost Inflation.
The group’s total operating costs increased by 7.4%, mainly driven by new stores and hyperinflation in Zimbabwe.
Its EBITDA increased by 7.2% and adjusted EBITDA, which excludes foreign exchange gains and losses on lease liabilities from the Zambian operation, movements in credit loss allowances and Zimbabwean legacy debt receipts, increased by 3.7%.
Overall, the operating profit increased by 23.5% from BWP 226 million (US$16.8m) to BWP 279 million (US$20.8m) as costs grew at a slower rate than gross profit with EBIT margins improving from 4.2% to 4.6%.
The group’s negative equity reduced by BWP 107m (US$7.9m) from BWP 448 million (US$33.45m) to BWP 341 million (US$25.4m) mainly due to trading profits.
Its inventory grew 35.2% reflecting higher costs of goods due to inflation and increased inventory buys over the past quarter to address global supply chain constraints.
According to the dual listed entity, it managed costs aggressively marginally increasing its total expenditure to BWP 1.083 billion (US$80.87m) from the previous BWP1.008 billion (US$75.27m).