Choppies reports 14.6% revenue growth and declares dividend

Choppies, Botswana-based southern Africa grocery retailer, on Monday declared a 0.6 thebe per share final dividend, bringing the total for the year to end-June to 2.2 thebe, down from 3 thebe a share last year.

This followed a 14.6% growth in revenue to BWP 9.17 billion. Gross profit was up 16.8% to BWP 1.89bn. Headline earnings per share were down 2.1% to 9.4 thebe.

On the JSE, where Choppies has a secondary listing, the share price fell 4.62% to R1.86, but the price is still significantly higher than 75 cents at the same time last year.

The group's retail sales increased by 14.7% to BWP 9.11bn, driven by 30 new stores, inflation, and volume growth. Choppies segments saw volume growth of 8.7% and achieved price growth of 5.1%. Choppies segment sales for like-for-like stores increased by 8.6%.

The gross profit margin improved by 40 basis points to 20.8%, due to improved margins in all segments except Liquorama.

The Liquorama gross profit rate reduced from 13.9% last year to 12.4% this year due to heightened competition from both liquor retailers and liquor wholesalers, and illicit liquor imports hampered margin expansion.

In pula terms, gross profit increased by 16.8% to BWP 1.89bn despite the competitive and challenging economic environment. Expenses increased by 21.8% due to new stores, inflation, the loss on the sale of the Zimbabwe segment, and impairment losses.

Operating profit (EBIT) decreased by 5.1% to BWP 318m. In contrast, adjusted earnings before interest and tax increased by 12.2% to BWP 386m.

Net finance costs last year included a credit of BWP 6.5m relating to the Kamoso acquisition, and excluding this, net interest reduced from BWP 112m in the prior year to BWP 100m. The reduction was due to lower debt offset by higher interest on leases because of new stores.

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