Choppies Enterprises has begun operations in Mozambique and Namibia as it expands its African footprint and the grocery retailer is gaining market share in South Africa.
The group has operations in Botswana, South Africa, Zimbabwe, Zambia, Kenya and Tanzania, and it is listed on the Botswana Stock Exchange and the JSE.
During the six months to end December the group opened 33 new stores, to take its total to 235 stores in the continent, it said on Friday.
It generates 40% of its revenue in Botswana and it reports in pula currency. In the results, it reported a 22% increase in revenue to P5.8billion (R7.15bn), while gross profit was up by 23% to P1.1bn.
“Despite the subdued economic environment in the country (Botswana), we maintained our market share and continued to improve our efficiencies,” the group said.
In South Africa, the group said significant improvement in the North West stores resulted in like-for-like revenue growth of 43%
“This growth has brought us to profitability in this region and we expect this trend to continue in the second half of financial year 2018.
“Segmental revenue increased by 43% and earnings before interest, tax, depreciation and amortisation (ebitda) was up by 335% compared to the corresponding period,” the group said.
In South Africa it is taking on retail giants Shoprite and Pick * Pay, which have also been expanding their presence in the rest of Africa.
In KwaZulu-Natal Choppies acquired a further eight stores effective from November 1, 2017. “Increased benefits of scale and other efficiencies will improve further as we expand our footprint in this region.”
The total retail space for the group increased by 17%to 340973m².
Zimbabwe also recorded encouraging improvement, and the company said it continues to perform better in that region despite the depressed economic conditions. “Revenue grew by 25%and ebitda by 12% as compared to last year.
It said overall performance had improved in the other regions, but it had yet to achieve profitability.
“The opening of new stores and distribution centres in other regions is in accordance with strategies adopted by the board. In the six-month period, three stores were added in Zambia,” the group said.
The group did not declare a dividend as it declares it once a year on annual results.
Choppies’ share price rose a steep 25% on the JSE on Thursday to close at R3.
Source: Business Report