Sefalana has reported that their financial year ended April 30, 2017 has been one of the most difficult due to the depressed economy, which affected the level of spending for both government and consumers.
Presenting the financial results recently, the group’s managing director Chandra Chauhan said this has had an impact on consumer confidence and ultimately on spending patterns noting that it translated into difficult conditions in their sectors where groups are recording a drop in earnings.
“This year has been one of the most difficult years for Sefalana in quite some time. The economy as a whole has been somewhat depressed and the level of spending by both government and the average consumers on the street has fallen significantly,” he said.
The group has recorded a P173 million profit before tax, which is a 16% drop compared to the P207 million that was recorded on the corresponding period in the prior year. The group’s gross profit was P297 million down by four percent compared to the P310 million that was recorded on the prior year.
According to Chauhan, although their Commercial Motor Limited (CML) contributed about three percent to their group turnover and profit before tax, its overall performance was disappointing as well.
“The performance of CML is very much dependent on government tenders placed in the market and the values of these tenders this past financial year were significantly lower than the prior year. We are exploring the
However, he said the group has pinned its hopes on the diversification of their businesses through the introduction of other products and services in to their stores, which they embarked on to boost the situation.
“We are hopeful that this is temporary and that in the ensuing year we will see a level of recovery. We have attempted to further diversify our businesses by the introduction of other products and services into or stores by focussing on the entire supply chain to extract efficiencies and through continued focus on expansion into the region,” he said.
In addition Chauhan said they have completed a rebranding initiative that commenced last year and are pleased to report that all their stores now have the new look.
He said their pipeline of new stores is still in place and being processed over the coming years, but at a steady rate until the economy improves.
Chauhan said the group has continued to focus on its core segments being the Fast Moving Consumer Goods (FMCG) businesses, but noted a downward trend across most of the Botswana businesses.