Sefalana Holdings, the parent company to Shopper and Cash and Carry continues to impress its shareholders with a good set of financial results.
The group’s latest financials show that it has managed to remain competitive and has achieved an overall rise in profit before tax (PBT) of 46 percent for the half year period that ended in October last year.
At the same time, compared to the comparative period the group’s revenue and gross profit are up by 2 percent and 25 percent respectively while the Basic Earnings per share (BEP) also went up by 55 percent.
On Friday, when presenting the group’s financial results, the Managing Director said that these growth rates have been predominantly underpinned by improvements in the company’s retail store performance as they focused on the provision of a larger product range, improving quality of service and understanding markets needs.
The group has shown a total turnaround ever since its legal victory against a South African company some eight years back. In 2009, the group unveiled the Shoppers brand, a chain of wholly- owned retail outlets, which seems to have brought a complete turnaround to the group’s financial performance as well as the highly competitive Fast Moving Consumer Goods (FMCG) industry.
The shoppers brand has since been rolled throughout the country as well as outside with first one already operating in Katima Mulilo, Namibia.
“We have entered into an agreement to purchase 12 additional stores across Namibia. The effective date of this acquisition is expected to be 1 May 2014, subject to Competition Authority approval,” Company Managing Director, Chandra Chauhan said on Friday.
Chauhan said he is anticipating that this acquisition would speed up the group’s entry into the region as well as enable it to be a major player in that market in a relatively short space of time.
Meanwhile the company stock also continued to do well on the local bourse. Its share price steadily increased from 275 thebe in May 2012 to 440thebe at 30 April 2013. It further grew from 440 thebe per share to over 690 thebe as at the end of last month. The increase represents a gain of over 50 percent during the nine months period and P5.21 by late last year.
Financial researchers at local stock brokering firm, Motswedi Securities say that at these levels, the Sefalana stock is now overvalued and investors have already factored in the expectations of good financial results. “Profit taking will likely set in as most investors cash in on their gains.”
The group’s consolidated statement of comprehensive income shows that when it closed its half year period by October last year, its Wholesaler, Sefalana Cash and Carry Limited (Sefcash) contributed 87 percent and 56 percent of the Group’s revenue and profit before tax, respectively.
At the same time, the group says it improved performance of its retail stores during the period which contributed significantly to the growth in the Trading ÔÇô Consumer segment’s turnover and profit before tax.