- Highest half-year results yet seen as a mark of resilience
- But gross profit tightened slightly 6.8% from 7.2% in previous period
- Absolute gross profit rose by 8% to P362 million
- Net asset position grew from P2.5bn in April 2024 to P2.6bn by October 2024
TLOTLO KEBINAKGABO
Sefalana Group has reported a record revenue of P5.4 billion for the 26-week period ended 27 October 2024 in a remarkable show of resilience and growth. This marks a 14 percent increase compared to the prior period, making it the Group’s highest-ever half-year result.
Said Managing Director, Chandra Chauhan, when presenting the company’s financial results in Gaborone recently: “It’s an incredible achievement, and I laud my Group for that.
“This is a solid increase in the context of inflation rates of between 2 to 5 percent in the region. Top-line growth is an indication of market share penetration.
In-store limitations
“We are pleased with the level of growth despite the challenges being experienced by suppliers and manufacturers, which placed limitations on what was available for sale in-store.”
Sefalana Cash and Carry (Sefcash) Botswana recorded a 13 percent turnover increase while Metro Namibia saw a 17 percent rise. Sefalana Lesotho posted a 12 percent increase, and Foods Botswana led the pack with a 26 percent jump. Like-for-like sales growth was 10 percent in Botswana, 6 percent in Namibia, and 8 percent in Lesotho.
Despite the revenue surge, Group gross profit margins tightened slightly, reflecting increased market competition. Chauhan noted that the Group achieved a gross profit of 6.8 percent compared to 7.2 percent in the previous period.
Declined margins
However, absolute gross profit rose by 8 percent to P362 million. “For easier comparisons, Sefalana intends to report its product-related gross profit at the April 2025 year-end and subsequent reporting periods,” Chauhan said.
Margins declined across key markets, with Sefcash Botswana recording a gross profit of 4.6 percent compared to 5.2 percent previously. Metro Namibia stood at 5.2 percent, down from 5.9 percent, while Sefalana Lesotho posted 6.2 percent, a slight increase from 5.8 percent in the prior period.
“Competitive pressures have heightened during the period as many suppliers are common to all our business units,” Chauhan noted.
Highest-ever dividend
Sefalana’s net asset position grew from P2.5 billion in April 2024 to P2.6 billion by October 2024, even after paying out the Group’s highest-ever dividend to shareholders.
Chauhan commented: “The market capitalisation of the group on October 28, 2024, amounted to P3.4 billion, making Sefalana the largest in the retail and wholesale sector on the Botswana Stock Exchange.”
The company’s cash position remained robust, sufficient to meet current liabilities and facilitate increased inventory for the festive season.
Share price
“In October 2024, a loan facility of P250 million, of which P200 million has been drawn down, was entered into with a large local bank,” said Chauhan. “In November 2024, these funds were utilised for a preference share investment in South Africa.”
The Group’s share price stood at P13.50 as at 27 October 2024, representing a 14 percent increase during the period. Chauhan added that the current share price had exceeded P14, marking a further 4 percent increase since October.
“Our consistent dividend policy of paying out approximately 50 percent of earnings in the form of dividends has provided a regular and sustained income stream for our shareholders for many years,” Chauhan said.