Sefalana expects P35m profit from Namibian stores
Pauline Dikuelo | Tuesday February 3, 2015 14:53
According to Sefalana‘s financial results for the six months ended October 31, 2014, Metro Stores should contribute approximately 30 to P35 million to profit by the financial year-end in April next year, prompting the Botswana Stock Exchange-listed retail group to search for more opportunities in the neighbouring country.
In July last year Sefalana acquired a chain of 12 Metro stores in Namibia, taking the total store compliment to 13 stores in that country, an achievement which has enabled the group to achieve a very significant presence in Namibia in a short space of time.
“These newly acquired stores outperformed the comparative period under their previous owners by 15 percent for the fourth month results since take over.” read the statement, adding that other potential sites were being considered for additional store openings.
“We continue to operate under the Metro name in Namibia as this is a well established brand there. We are also looking to introduce a loyalty programme in the New Year that will benefit our customer base,” read the statement, which accompanied the financials.
Overall, Sefalana said despite the ongoing challenging economic conditions in Botswana, coupled with increases in the cost of borrowing and continued pressure on consumer and government spending, the group remained competitive, achieving a profit before tax of P80.5 million.
This represented a 27 percent increase in profit compared to the prior period, a growth that has been attributed to the focus and leveraging of the core Fast Moving Consumer business (FMGC).
In Botswana, the group owns 48 outlets comprising three hyper stores, 25 Sefalana ‘cash and carry’ and 20 shoppers retail stores.
In the period, Sefalana’s share price recorded an impressive 34 percent increase from Rights Issue price of P6.95 to its current price of above P9.30, while basic earnings per share at 28.20 thebe, were up by six percent. Sefalana’s revenue increased by 32 percent to P1.6 billion on prior period.
‘Last year we reported that Commercial Motors Limited has secured two significant tenders for the supply of vehicles. The supply and delivery of these has progressed well and has contributed to the very positive results from this segment.” read the statement further.
Furthermore, Sefalana remained positive about its future and expected to grow business through continued focus on core business segments.
“We have a number of capital development projects scheduled for the next three years. A specific P100 million long term (15years) debt facility will be utilised to fund these projects.”
A maize plant was also scheduled to be commissioned in Serowe some time this year after failing its initial commissioning date of December last year. Delays were attributed to the upgrading of the site preparations for the plant.
“This additional business is expected to improve group profitability through efficiencies in the supply chain of maize-based products sold by Sefcash in its retail and wholesale outlets,” the company said.
Their Zambian property was also said to be fully let and continued to generate a very good rental steam as the improved tax legislation for property rental companies has helped to improve the overall earnings generated form this sector.
In December last year Sefalana appointed the former Vice president Dr Ponatshego Kedikilwe as Chairman of the Board.