Namibian business boosts Sefalana
Isaac Pinielo | Friday July 31, 2015 14:28
According to the group’s audited financial results for that period, the Namibian business made a significant contribution of over P800 million to the group’s turnover and P26 million to profit before tax.
This represented 23 percent of the group’s turnover and 14 percent of group profits.
Sefalana group managing director, Chandra Chauhan said they are very proud of the results and expect this to be a sizable and growing segment going forward.
“We are very excited about this new market and look forward to extracting further value from it for our stakeholders. Other potential sites in Namibia are also being considered for additional store openings,” he said.
Sefalana acquired a chain of 12 Metro stores in Namibia early last year, taking the total store compliment to 13 in that country.
The group said the acquisition was a major focus area this year and that it has enabled the group to achieve a very significant presence in Namibia in a short space of time.
According to the group, these newly acquired stores outperformed the comparative period under its previous owners by over 15 percent for the 10-month results since the takeover.
“We continue to operate under the Metro name as this is a well-established brand in Namibia. Total consideration paid for the business was N$149 million (P118.9 million) exclusive of inventory.
Meanwhile, Sefalana achieved an overall profit before tax of P191.1 million for the year, which represents a 23 percent growth in profit compared to P155.7 million in the previous year.
Management said the group remained competitive despite some challenging economic conditions during the year, and significant increases in the cost of borrowing across the country, coupled with ongoing pressure on consumer and government spending.
Chauhan said the group predominantly grew its profit through continued focus on the core businesses, in line with the group’s strategy.
“This included the group’s first major acquisition in Namibia, which has yielded strong performance since take-over in July 2014.
For the year under review, the group’s revenue was P3.5 billion, an increase of 46 percent compared to P2.4 billion the year before. Gross profit was P282.7 million, which is up by 23 percent from P229.3 million the previous year.
Sefalana Cash and Carry Limited contributed 65 percent and 47 percent of the group’s revenue and profit before tax for the year respectively. At the beginning of the financial year, Sefalana operated three hyper stores, 25 cash and carry stores and 18 supermarket retail stores across the country.
“During the reporting year, we increased our market presence by opening two additional supermarkets in Tlokweng and Ghanzi as well as refurbishing our store in Orapa.
This brought our total number of retail outlets to 20 and total number of stores across Botswana to 48 at the year-end.
We also opened our first Quick store in Mogoditshane after the year-end in June 2015,” said the MD.
He stated that the group continues to seek additional suitable locations for further store openings as it moves towards its target of 70 stores across Botswana.
He added that the model remains to be focused on opening new stores only where it is viable and does not ‘cannibalise’ other existing Sefalana stores.