Sefalana Holdings has shrugged the tough economic climate to report better results that showed it grew its headline earnings as it aims to be to be at the helm of retail market in Botswana and the region.
The diversified group’s results for six months ended 31 October, 2014, showed revenues went up by 32 percent from P1.2 billion the previous year to P1.6 billion.
“We are happy to report that, despite ongoing challenging economic conditions, increases in the cost of borrowing, and continued pressure on consumer and Government spending, Sefalana has remained competitive, achieving an overall profit before tax of P80.5 million for the six month period to 31 October, 2014,” a statement accompanying the results stated.
“This represents a 27% growth in profit compared to the comparative period to 31 October 2013 (“the prior period”).”
The Botswana Stock Exchange (BSE) listed company, with market capitalisation of P1.4 billion, said it predominantly grew its profit through continued focus on, and leveraging off, the core Fast Moving Consumer Goods (FMCG) business, including its first major acquisition in Namibia.
During the period, Sefalana acquired the entire Metro chain in Namibia, consisting of 12 stores strategically located across the country.
According to the company, Sefalana Cash and Carry Limited (Sefcash) contributed 70 percent and 45 percent of the group’s revenue and profit before tax for the reporting period respectively and operates 20 retail outlets and total number of stores across Botswana.
“We look towards greater growth and success in this business segment during the ensuing years as the local economy recovers,” stated the company.
“We continue to seek additional suitable locations for further store openings as we move towards our target of 70 stores across Botswana,” it said.
Sefalana revealed that the tender to supply vehicles by Commercial Motors (Pty) Limited has progressed well and has contributed to the very positive results from the trading-others segment.
“The remaining units pertaining to these tenders are expected to be delivered in the second half of the financial year. We are currently looking to secure additional long term contracts for delivery over the coming years. This should help further establish our brands in the local market.”
On 21 January 2015, the Board of Directors of Sefalana Holding Company Limited declared an interim gross dividend of 10.00 (ten) thebe per ordinary share.
On the manufacturing side, it said Foods (Botswana) (Pty) Limited placed greater emphasis on developing and selling products to non-government bodies and individuals, in a bid to reduce dependence on the large contracts.
Foods (Botswana) contributed to 6 percent of the group’s turnover and 21 percent of group profit before tax. The company is also looking to commission a maize plant in Serowe during the first quarter of 2015.
Despite the challenges facing the economy, Sefalana said it remains very positive about its future and expects to grow the business through continued focus on core business segments and in particular through its acquisition in Namibia.
“We are also currently in discussions with third parties relating to two other potential transactions.”