The country’s leading funeral services provider, FSG Group, intends to focus on regional expansion in South Africa and Zimbabwe, this year.
Listed on the Botswana Stock Exchange (BSE), the group currently operates in Botswana and Zambia. In its latest full-year results released on Friday, FSG group managing director, Milivoje Nikolic stated that the group performed in line with expectations. “In the year 2015, the group will focus on regional expansion in South Africa and Zimbabwe. Opportunities to diversify are also being considered. Investment in modernisation of fleet and other infrastructure to equip the branches with better customer-service delivery will continue,” he said in a commentary.
Nikolic further said revenue and profit before tax showed remarkable growth, adding that the group retained its position as the market leader.
During the year ended 31 December 2014, the group’s revenue increased by 11 percent to P123 million in 2014 from P111 million in 2013. Profit after tax increased by 9.96 percent to P30 million from P29.7 million in the previous year. Income from package scheme increased by 20 percent and shareholders’ equity exceeded P200 million.
According to Nikolic, the group’s strategy of opening new branches, and investing in infrastructure and modernisation, over the last two years contributed to the growth in revenue and profitability.
During the year, a new satellite branch was established in Ramotswa, which feeds into Gaborone branch. The tax expense of the group was higher as in the prior year as there was a write-back of deferred tax.
“The operating environment will continue to be challenging. Investment in modernisation of fleet and other infrastructure to equip the branches with better customer-service delivery will continue,” he said.
In the Zambian market, growth in revenue from services and package scheme increased in Kwacha terms by 14 percent. Nikolic said the weakening of the Kwacha impacted negatively on the performance of the Zambian subsidiary, resulting in a loss. He, however, indicated that efforts have been made to mitigate exposure to exchange risks, by replacing a significant portion of the Pula borrowing with local Kwacha borrowing.
Nikolic also said land has been acquired in Kitwe for the opening of a new branch and that they are awaiting permission for change of use from the local city council. The group is said to be actively pursuing the strategy to open new branches in other towns in Zambia.
Incorporated in Botswana in 2003, with over 25 branches nationwide and a market share of 65 percent, the directors of FSG are bullish on future prospects.
The group, through its wholly owned subsidiaries, carries on the principal business activity of manufacturing and retail of coffins and caskets, provision of funeral-related services and provision of funeral insurance in partnership with Botswana Life Insurance Limited.
These subsidiaries include FSG Manufacturing trading as Lyn’s Funeral Parlour, FSG Services trading as Kagiso Funeral Parlour, FSG Assurance, FSG Properties, FSG Limited (a Company registered in Zambia), Botswana Funeral Services Group (a Company registered in South Africa). The company has another wholly owned subsidiary, Private Cemeteries, which is engaged in the business of managing private cemeteries in Botswana.
Meanwhile, the group has appointed Victor Senye as an independent non-executive director of the board with effect from 05 March 2015. He is also the board chairperson of the Botswana Investment and Trade Centre (BITC).
The group has declared interim gross dividends of six thebe per share paid out on 13 October 2014. The directors have resolved to declare a final gross dividend of eight thebe per share subject to deduction of withholding tax at 7,5 percent payable to members on the register.