Sefalana�s new Lesotho stores rake in P155m
Pauline Dikuelo | Tuesday August 1, 2017 16:04
Presenting their financial results for the year ended April 30, 2017, Sefalana managing director, Chandra Chauhan said the mountain kingdom’s market has a lot of potential and they are currently exploring other sites in Maseru for additional store opening.
“This acquisition gave us a very strong presence in that market from our first day of trading by increasing the group turnover by P155 million in the first six months of operation.
This amounted to about four percent of the group’s turnover. We are in search of further sites for additional stores as we look to grow our presence in that country over the next few years,” he said.
Sefalana operates three Hyper Stores, 25 cash and carry shops and 22 retail shops that trade under the Shoppers brand.
Sefalana entered the Lesotho market last November through the takeover of the country’s largest Cash’n Carry outlet, TFS Wholesalers, which is located in Maseru.
The acquisition was made possible through part proceeds of a right issue programme, which was oversubscribed.
However, a large part of the balance of funds would be utilised to support the group’s expansion plans in South Africa.
The Sefalana Group made a turnover of P4.3 billion in the year with profit before tax down 16% to P173 million.
The cash and carry business contributed a turnover of P23.5 billion while its profit was down 23% to P75 million.
According to Chauhan, the retail division is growing as well in the Botswana market as the group has increased a number of stores and awareness of their brand.
Currently, Sefalana has about 51 stores in Botswana and 23 retail outlets with the Kanye one being the latest. The group also has plans to open two more stores in Mogoditshane this financial year.
On their property portfolio, Chauhan said Botswana performed well contributing about 18% to the group’s profit before tax.
He said almost all of their properties are tenanted and leases are in place for between three to seven years.
The group has also managed to secure a property in Keetmanshoop in Namibia, where they intend to build a new store this financial year and also have identified a prime location to house their Namibian Head Office and Cash’n Carry.
In Zambia, he said two of their largest tenants have vacated to smaller premises and they are currently searching for replacements.
“We have managed to maintain the remaining leases in US dollar despite some rumours in the market that formal legislation would be passed to mandate that all leases be converted into kwacha-based agreements,” said Chauhan. During the year, the group also extended their relationship with BotswanaPost who operates post office kiosks inside four of the Sefalana stores in Gaborone.
Towards the end of this year, Chauhan said they intend to commence the development of a series of warehouses at the Setlhoa site, which he said is likely to include a Sefalana Shoppers store along with a number of strong high street names, which is expected to attract additional feet to the area.