BY BONNIE MODIAKGOTLA
A combination of cost savings, extraction of efficiencies from existing businesses, and improvement in consumer spending and sentiment are some of the reasons cited by Sefalana Group after it delivered an impressive set of half year financials.
The Botswana Stock Exchanged listed retailer on Friday released its unaudited financial results for six months ended 31 October 2018.
The company beamed with pride after revenue shot up 13 percent to P2.5 billion, and at the end the company realized a profit before tax of P76.3 million, an improvement of 25 percent from the previous corresponding period.
The latest set of results are on the back of Sefalana’s April 2018 full financial results in which the company made a profit of P231.7 million, and have since then classified them as the “best ever results to date.”
The retail behemoth says the improvement in performance and newly found momentum is a result of unflinching focus on cost saving initiatives and extracting additional value from some of their existing businesses.
Also adding boost to the top and bottom line was returns from the investments the company made when it bought into a South Africa chain stores. In 2017, Sefalana injected around P200 million in a consortium for acquisition of supermarket and wholesale chains in South Africa
“Our focus for the ensuing six months ended 31 October 2018 remained very much aligned with this approach. We further progressed overhead cost saving programs and improved processes and structures within the Group, streamlining operations so as to maximize return from these businesses,” Sefalana said in a commentary accompanying the results.
During the six months’ period under review, the company says its Botswana operations benefitted from improved trading conditions as the market is starting to show signs of recovery as evidenced by consumers visiting stores often and increasing their basket size.
“We are hopeful that this trend continues, but this will largely be dependent on growth of other sectors in the economy and the extent to which employment increases.”
The Botswana based Group with interests that spans consumer goods, commercial motors, manufacturing, properties and government contracts also operates in markets outside Botswana: Namibia, Lesotho and Zambia. Sefalana says its foray in foreign markets helped maintain the Group’s overall performance. However, the company admitted that this diversification in other markets has brought with it foreign exchange exposure, and in the period under review, Sefalana lost P45 million.
On future prospects, the Chandra Chauhan led confederate says at the recent Group strategy workshop, Sefalana board of directors affirmed the Group’s intentions to continue focusing on the Group’s core business ÔÇô Fast Moving Consumer Goods (FMCG) and also giving special attention to supporting businesses.
“This has worked well for us and we anticipate further growth in this area. In particular, we look forward to expanding on our manufacturing business with fruit juice and bottled water,” part of the commentary read.
Sefalana’s top honchos say they will also explore and evaluate other neighboring regions as part of their regional expansion drive but warned that they will do this in a cautious and measured approach.