Retail ops power Sefalana to "best ever results"

MBONGENI MGUNI
Staff Writer | Friday August 2, 2013 00:00

'Yet another fantastic year for Sefalana,' directors said on Wednesday in a commentary accompanying the group's results for the year ended 30 April 2013.'The group achieved its best result ever last year for the period ended 30 April 2012 and despite all the challenges in Botswana due to cut-backs in government and consumer spending, general decline in the world economies and difficult economic times, Sefalana has yet again performed above expectations and has far exceeded last year's results'.For the year, revenues were up 12 percent to P2.4 billion, profit for the year up 38 percent to P120.2 million and basic earnings per share up 35 percent to 61.5 thebe. The results come as Sefalana stretches its lead as the Botswana Stock Exchange's biggest gainer of the year thus far, having put on 61 percent as at Wednesday as investors bought into the promise of a strong performance.

Sefalana directors said the counter was trading at a 'significant discount', adding that 'this set of results and the prospects for the coming years will see an enhanced demand for our stock demand, thereby further increasing shareholder value'. In their commentary, directors said anchoring the results was strong growth in the group's retail operations, which contributed 86 and 59 percent of the group's revenue and profit before tax respectively for the year.The group's retail operations are clustered under Sefcash and comprise Sefalana Hyper and Sefalana Cash and Carry stores as well as the fast-growing Shoppers' brand of consumer goods stores. According to its results, revenues in the 'trading consumer goods' segment rose seven percent year on year to P2.01 billion.

'The improved performance of our retail stores contributed significantly to the growth in this segment's turnover and profit before tax,' directors said in the commentary.'This has been achieved through better product offering and enhancing the shopping experience for our customers.' During the year under review, Sefalana opened additional Shoppers stores in Palapye, Selebi-Phikwe and Nkoyaphiri. The group has plans to open three more stores in the next three months.

'Following our detailed group strategy review earlier in the year, we are now actively looking at entering into regional markets and anticipate that by December 2013, we will have our first store outside Botswana'. Sefalana's other subsidiaries supported the growth in the retail division, with Commercial Motors (Pty) Limited securing a number of deals during the year.  Another subsidiary, Foods Botswana, doubled its profit before tax during the year despite a two-month delay in the commencement of lucrative government contracts to supply Tsabana and Malutu.

'This (the doubling of profits) was partly due to orders for additional volumes, but also because of the quality of grain procured which resulted in a better than expected yield,' directors said.'Foods Botswana contributed six percent of group turnover and 14 percent of group profit before tax. This was Foods Botswana's best ever year too'. Directors said the group's property interest performed well with the Zambian assets fully let and generating 'a very good rental stream'. The Botswana portfolio continued to generate a strong rental yield with an average capital appreciation of seven percent. 'We are proud of our performance to date and look forward to further enhancing shareholder value during the forthcoming financial year,' directors said.