- PAT increased to P108m from P38m
- Group revenue increased by 18.9%
- But Botswana operations show modest revenue growth
- Rest of Africa moves into profitability
In monetary terms, the increase translated into P108 million in profit after tax for the half-year ended 31 December 2021 compared to the P38 million recorded in the 2020 period.
According to the group, which is listed on both the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (JSE), Choppies’s revenue increased by 18.9 percent to P3.2 billion from P 2.7 billion in 2020 driven by the seven new stores coupled with strong volume and price of growth in its Rest of Africa operations (Namibia, Zambia and Zimbabwe). In pula terms, gross profit grew by 14.7 percent to P686 million (2020: P 598 million) despite the challenging economic environment.
But Botswana operations experienced modest revenue growth to P2.2 billion compared to P2.1 billion in 2020 mainly as a result of negative volume growth due to the impact of the COVID-19 pandemic on the economy and consumer spending. The group stated that the 2.1 percent increase shows the continued show of strong resilience by the business in an increasingly challenging economic environment.
“The Botswana economy experiences a confluence of elevated inflation, high unemployment, and lower economic growth,” says Choppies. “Operating expenditure was managed well, increasing by 6.5 percent despite two new stores and increasing by 1.8 percent after excluding one-off bad debt recoveries from last year’s costs. Due to extremely challenging trading conditions, operating profit reduced by 9.7 percent but the Earnings Before Interest and Taxes (EBIT) margin remains healthy at 5.9 percent,”
The Rest of Africa operations have shown a significant improvement in EBIT moving into profitability of P50 million from last year’s EBIT loss of P 7 million. “The Rest of Africa revenue increased by 89.0 percent to P 992 million (2020: P 525 million) driven by the addition of five new stores, inflationary increases in Zimbabwe and Zambia and volume growth in all countries,” the group’s financial results revealed.
Choppies says it expects continued uncertainty in its business and the southern African economy due to the duration and intensity of the COVID-19 pandemic, the duration and extent of economic stimuli, timing and effectiveness of global and regional vaccines, and volatility in employment trends and consumer confidence, all of which may affect its results.
