Choppies turns a big profit in South Africa

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Choppies turns a big profit in South Africa

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Published Date: 2018-04-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Choppies turns a big profit in South Africa

The retailer's operations in the North West turned profitable, with a surge in earnings

Strong growth at its South African stores has helped Choppies deliver a strong first-half performance. The Botswana-based retailer said there was a significant improvement in its stores in the North West province in the six months ended December and it expects the trend to continue through the end of the year. Segmental revenue jumped 43% and earnings before interest, tax, depreciation and amortisation (EBITDA) surged 335% as the North West became profitable. In KwaZulu-Natal, it acquired a further 8 stores last November and says increased benefits of scale and other efficiencies will improve as it expands its footprint in the region.

Despite a subdued economic environment in its home market, where it makes 40% of its revenue, it maintained market share and continued to improve efficiencies. Revenue from its Botswana stores increased by 6%, with EBITDA rising 11%.

In Zimbabwe, it grew revenue by 25% and EBITDA by 12% in spite of depressed economic conditions. Three new stores were opened in Zambia.

Group revenue rose 22% to P5.76 billion in the six months to December. Operating income jumped 23% to P1.15 billion and headline earnings per share were up 19% 5.36 thebe. It said its results were delayed after its board of directors told management to perform more detailed valuation procedures on its inventory. An audit by PwC didn't identify anything that necessitated changes to its results.

Its shares rose 25% to close at R3 on Thursday. They fell 15% on 23 March after it withdrew an earlier trading statement and delayed the release of its results.



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