Choppies Strategic Expansion Drive A Success 

  • Group reports success amidst economic headwinds in Zim
  • Notes acquisition of Kamoso for impacting financial performance
  • Acquisition included 100 liquor and hardware stores




In an assertive move to diversify and expand its retail footprint, the Choppies Group acquired the Kamoso Group, significantly impacting its financial performance for the six months ended 31st December 2023.

This strategic acquisition propelled the group’s retail sales up by 21.3 percent, notwithstanding the economic headwinds faced by its Zimbabwe segment.


“During the current period, the group acquired the Kamoso Group in order to increase store footprint, diversify the group, and reduce reliance on related parties,” it says in its latest financial results.


Notable volume growth


The acquisition of Kamoso included 100 liquor and hardware stores, contributing to a notable volume growth of 8 percent across the Group’s segments, albeit with Zimbabwe experiencing a downturn.


Choppies says the economic situation in Zimbabwe negatively impacted the segment’s performance, contrasting sharply with the Group’s overall positive trajectory.


But inspite of these challenges, Choppies reported a volume increase in like-for-like stores of 1.6 percent, with price growth inching up by 0.6 percent, primarily affected by weaker translation exchange rates.


Operational efficiency


This is the Group that saw operational efficiency and strategic acquisitions paving the way for an impressive 28.4 percent increase in operating profit (EBIT) from P141 million to P181 million.


Adjusted EBIT, which provides a clearer picture by excluding foreign exchange variances and other non-operational items, saw a remarkable increase of 37.9 percent.


The financial stewardship of Choppies is evident in its handling of net finance costs, which rose due to inclusion of finance costs related to the Kamoso acquisition.


Strategic debt reduction


“The effective tax rate is lower than the standard rate mainly due to the legacy debt receipts from Zimbabwe that are exempt from income tax,” the report notes, highlighting the nuanced financial management that contributed to its performance.


A testament to its prudent financial management is the Group’s strategic debt reduction. With a net decrease of P269 million from the previous year, Choppies says this was achieved through a combination of debt settlement totalling P312 million and a rights issue that contributed significantly to the repayment efforts.


The Botswana segment, in particular, stood out for its resilience in a tough economic environment, posting a 9.4 percent increase in sales and a 6.7 percent growth in like-for-like sales.


20th Birthday Bonanza


“The excellent performance resulted from good in-store execution and improved customer engagement,” says the report. The segment’s success is attributed to effective inventory management and successful execution of promotional events such as the 20th Big Birthday Bonanza, which significantly enhanced customer engagement.


Despite competitive pressures, the Botswana segment managed to improve gross profit margins by 60 basis points, underscoring Choppies’ competitive edge in the market. “Although the segment is still very young, it has achieved dominance in the market in only 20 years,” says the report.