Several companies listed at the local bourse are on the verge of being suspended after they failed to publish their financial results within the stipulated time, warned the Botswana Stock Exchange. The BSE has since issued letters to the errant companies.
In a flurry of cautionary letters issued this week, it came to light that certain listed companies have been lax about the publication of their results on time, something which has irked BSE since it contravenes the listings requirements. Amongst the affected companies is the blue chip company Choppies, the repeat offender Olympia Capital, and GS4, the only listed security solutions company.
The listings and trading department of the BSE says the defaulting companies are contravening the BSE listings Act which requires listed companies to publish their results within three months from the financial year end. Non-complying companies run the risk of having the trading of their shares suspended and a possible termination of the companies’ listing on the bourse.
Choppies Enterprises Limited is being warned for not submitting its interim results for the half year ended December 2017, which are four months behind schedule. In January, the retailer announced its closing period for trading in shares as it was busy preparing the interim financial results to be published on or before 19 March 2018. In late February Choppies released another trading statement, revealing that it is expecting growth of about 25 to 35 percent in earnings per share (EPS), and headline earnings per share (HEPS) amounting to 20 to 30 percent.
“The increase in HEPS and EPS has been driven mainly by an improved performance by the South African operations,” Choppies management said at the time.
The statement was later withdrawn on the 23 March, around the same time the results were expected to have been published. The retraction of the statement was on account of Choppies’ new dealings with its recently appointed auditor after parting with its long term auditor KPMG in January. The leading local grocer said the guidance of earnings growth contained in the previous trading statement could not be relied upon given the new developments.
“The Board of Directors of Choppies Enterprises Limited advises that they have instructed management to perform more detailed procedures on verification and valuation of inventory in conjunction with the new external auditor PricewaterhouseCoopers (PwC), appointed on 31 January 2018. This process will only be completed by 30 April 2018 and hence creates uncertainty regarding the impact of any potential adjustments, if any, on the results,” cautioned the company in the statement.
“The Board will also like to inform shareholders that the publication of results for the half year ended 31 December, 2017 will be delayed and are expected to be published on or before 30 April 2018.
Other companies that have received the threatening letter is GS4 and Olympia, with the latter being a habitual offender. Olympia, an investment holding company in the building material industry in Southern Africa, was admitted back on the BSE after spending 4 years in the wilderness following its suspension from trading due to failure to publish financial results on time. This week the parent company to Kalahari Floor Tile and Plush products once again runs the risk of being suspended for failure to publish audited annual financial statements for the year ended December 2017.
The defiant Olympia released a trading statement a day after it was cautioned by the BSE, stating that the company’s results for the period will be lower than those reported in the previous year due to the challenges faced in 2017, those include macroeconomic factors in the company’s exports markets which contributed significantly to the decline coupled with decreased local consumer demand for the company’s products. Moreover, the company said the financial information on which these statements were based have not been yet viewed or reported on by its auditors, before revealing that the results will be published later in early May.
“The detailed results for the year ending 31 December 2017 are expected to be released on or about 4th May with the delay emanating from review by the auditors subject to critical third party information which has been slow to obtain. The accounts are currently in draft status and still need to be reviewed and approved by the board,” said Olympia’s board of directors.
On the other hand, G4S said the delay in releasing its financials for the year ended 31 December 2017 is due to enterprise resource planning challenges relating to system generated transactions hidden behind a source code. The security solutions company says its accounts are currently in a draft status and still need to be reviewed and approved by the board.
Nonetheless the Board of G4S Botswana announced that the company’s results for the year ended 31 December 2017 are expected to be higher than those reported for the year ended 31 December 2016 on the back of improved customer retention and liberation of resources. This is despite the fact that the financial information is yet to be reviewed or reported on by G4S Botswana auditors.