Wednesday, January 26, 2022

Choppies’ South Africa loss dents retailer’s good results

The Choppies Enterprises Limited loss reported on South Africa’s operations is said to be because of the initial operating expenses of the newly opened stores, however the stores will become profitable as the size of the business reaches a critical mass.
The listed retail giant said it is working on developing house branded products across all the key categories.
“Dedicated and cross-functional teams are working on the house brand business, which will lead to continuous improvement in share of house brands in the key categories as well as improvement in overall margins. Partnerships with manufacturers, product improvement and innovation also help in better performance of the house brands,” reads the financial statement.
While the South African economic environment is challenging, Choppies said it is well positioned for growth in the market due to its focus on value-for-money retail outlets in areas that are currently under-serviced by traditional retailers.
“With the recent commissioning of our warehouse in Rustenburg, we are well positioned for growth, as the warehouse is capable of servicing between 80 to100 stores,” it added.
South Africa Choppies recorded a revenue growth of 64 percent and opened four new stores adding a total of 8,600 m in the current financial year with a total no of employees 1,936.
The financial results and financial position of Choppies for 2012-2013 has been strong for the company building further on the good performance in 2011-12.
The company said steps taken in the previous year to secure, preserve and enhance its economic value, have enabled it to provide better financial results thereby adding value to the stakeholders’ satisfaction.
“The opportunities explored in the previous year, have given the organisation firmer ground to build a more efficient and productive business. Despite a challenging economic environment, the group continued to grow above its markets, delivering strong top and bottom line results,” reads the statement.
The chain store says the ongoing monitoring and analysis of the markets in which they operate, buttressed by continued investment in supply chain management and company infrastructure, enabled them to maintain their price advantage without compromising quality and profitability.
The financial position remains healthy, with long-term debt accounting for just P 86.64 million, out of total equity of P738.6 million. The debt-equity ratio of 0.12 times is well within the Group’s servicing capability and leaves scope to finance store expansion plans over the near term.
“The group now has crossed the milestone of a 100,000 m of retail space in the current year. This is a remarkable achievement. Botswana Opened 6 new stores adding a total of 9,491 m in the current financial year,” says the statement.
┬áThe group’s revenue went up by 22 percent, Gross Profit also up by 28 percent while the Net asset value saw an increase of 17 percent. The Net Profit went up by 19 percent while there was an increase in retail space by 34 percent.

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