- P195m in profit before tax is up 28% on prior period
- 5bn revenue is up 29% on prior period
- Sefalana now the largest in Retail and Wholesale sector on BSE
Sefalana has reported a positive level of recovery from the effects of the COVID-19 pandemic, which has been the centre of all trading and decisions across the retail and wholesale group for almost three years.
Highlighting this in its recently released audited group financial results for the 27-week ended 30 October 2022, Sefalana says it has recorded its best half-year results to-date; this being on the back of reporting the Group’s best full year results in its 48-year history to 24 April 2022.
“Our diversification across sectors and territories has helped enable us to consistently deliver better results year-on-year,” the Group says. “For the period under review, the Group generated a profit before tax (PBT) of P195 million, up 28 percent on the prior period.” Its net asset position grew from P2.0 billion at April 2022 to P2.2 billion at October 2022, this after P75.2 million final dividend was paid to shareholders in 2022. Market capitalisation of the Group stood at P2.4 billion at 30 October 2022, placing Sefalana as the largest in the Retail and Wholesale sector on the Botswana Stock Exchange.
During the period under review, the Group says it invested significantly in inventory to ensure shortages were minimised, enabling it to avoid stockouts and provide its customer base with consistent product offering. “There have been numerous price increases from suppliers in South Africa over the last 18 months, and where possible we have increased procurement to mitigate these increases,” the Group notes. “In doing so, we have been able to delay price increases to our end consumer in many instances.
“Our cash position at the end of October 2022 is good and sufficient to meet all our current liabilities with a sensible and prudent retention. Overall, our working capital position (also) remains strong and puts us in good stead.” Thanks to this continued level of growth, the Group says it created employment for an additional 493 people during the period, taking its total number of employees to 6,112. Sefalana, which operates 118 stores in Botswana, says it expects the employment creation to grow in the second half of 2023 as it continues to focus on employing citizens in all areas of operation.
The Group’s business units in Botswana in overall made up 62 percent of its PBT, generating P120 million of profit before tax for the period, compared to P75 million in the prior period. Of all of its units in Botswana, the Group’s Fast Moving Consumer Goods (FMCG) segment experienced the most significant growth with an impressive turnaround in both the Wholesale and Retail business despite the adverse effects of the trading restrictions and other protocols devised to contain the spread of COVID-19 for much of the last two years.
Sefalana notes that these have since been lifted and there has been solid recovery of performance by this segment as a result. “There remain several import restrictions on confectionary, fruit and vegetables, but we have managed to mitigate the downside impact of this through diversification into wider product and service offerings,” the Group notes in its results, adding that it supports local producers with favourable trading terms where possible.
At the end of the period under review, the Sefalana Botswana FMCG business consisted of 4 hyper stores (Sefalana Hyper), 25 cash and carry stores (Sefalana Cash & Carry) under which there are 31 supermarket retail stores (Sefalana Shopper), 53 liquor stores (Sefalana Liquor), 4 convenience stores (Sefalana Quick), and one catering outlet (Sefalana Catering), giving the Group 118 stores in Botswana. “Sefalana Cash & Carry Limited contributed 54 percent and 40 percent of the Group’s revenue and PBT for the reporting period, respectively,” says the Group. “Revenue amounted to just over P2.4 billion, which is an impressive 35 percent up on the prior period.”
In addition to its FMCG segment in Botswana, the Group has manufacturing, milling and beverages divisions as well as a small segment that consists of Commercial Motors (Pty) Limited and Mechanised Farming (Pty) Limited which contributed 1.3 and 1.5 percent to Group turnover and PBT, respectively in the period under review. The Group also has a property portfolio in Botswana as well as the recently introduced financial services division, SefRemit, that currently operates seven branches with plans to roll out the kiosks to a further 23 of Sefalana stores over the next 18 months.