Retail expansion anchors Sefalana profit growth
Wednesday, January 29, 2014
In its unaudited financial results for the six months ended October 31, 2013, the group’s revenue was up two percent to P1.18 billion. The company's profit before tax rose 46% to P63.6 million. The results show that the growth rates have been predominantly underpinned by continued emphasis on improving retail store offering, focusing on the provision of a larger product range, improved quality of service and better understanding of market needs. Due to an aggressive expansion of its Shoppers supermarkets, Sefalana now operates over 42 wholesale and retail businesses across the country. The group is the second largest retailer after Choppies.
In the period under review, Sefalana Cash and Carry Limited (Sefcash) respectively contributed 87% and 56% of the group’s revenue and profit before tax. The group states that Food Botswana contributed eight percent of group turnover and just over 29% of profit.
Whilst celebrating milestones in inclusivity, with notably P5 billion awarded to vulnerable groups, the report sounds a 'siren' on a dangerous and growing trend: the ballooning use of micro-procurement. That this method, designed for small-scale, efficient purchases, now accounts for a staggering 25% (P8 billion) of total procurement value is not a sign of agility, but a 'red flag'. The PPRA’s warning is unequivocal and must be...