Choppies bounces back

Choppies shareholders whose stock had been frozen at the local bourse were on Friday given a reason to rejoice following a decision to lift trading suspension by the Botswana Stock Exchange (BSE).

This means shareholders can now trade their stocks; allowing the share price to start moving possibly up from the rock bottom it hit when trading was suspended. Current share price is 69 Thebe per share – where it had remained dormant since suspension in November 2018.

The BSE said trading of Choppies shares effects Monday 27 July 2020.

That was after Choppies announced three sets of results – 31 December 2018 Reviewed Interim Financial Statements and the Auditor’s Review Report; 30 June 2019 results for the year ended June 2019 and Group Interim Reviewed Results for the year ended 31 December 2019.

It was the failure to timely publish results in 2018 that led to the retail giant’s suspension; a development that the company blamed on the delay by auditors to render their opinion on the results.

Choppies Group CEO Ramachandran Ottapattu said the lifting of suspension to trade on the stock exchange shows the Group’s emphasis to continue to be strong in the market.

Ottapattu appreciated the support that BSE has shown to Choppies during the turbulent period of suspension, adding that the business has been normal for the Group amid suspension.

“The business has always been normal for Choppies in the regions of Botswana, Zimbabwe Zambia and Namibia. The suspension invoked on us by BSE had disruptions but we have the board that is supportive. We cleared the issues now we are back on track,” Ottapattu said.

He said their focus as they start trading is to consolidate the business market share as they eye to return to full profitability in the stock exchange; stressing that this is their top focus.

Covid-19 pandemic, Ottapattu said, has had a very small impact on the operations of Choppies business, saying they continued to make profits despite circumstances that prevail.

“The business continues to do well in the regions that we operating within. Botswana business continue to do well, Zimbabwe is also okay while Zambia and Namibia businesses are growing as well,” Choppies Group CEO said highlighting new more stores will be added across the country.

Financial results

The Group says it has recorded a negative equity mainly due to unrealised foreign currency translation and trading losses from regions that were discontinued since June 2019 year-end.

The negative Group equity gave rise to extensive investigations into the ability of the Company and Group to operate as going concern for the next year and medium thereafter.

“Group revenue in year under review decreased by 11% from P10 791 million to P9 620 million due to a P1.1 billion decline in turnover from the Zimbabwe segment on the back of a volatile macro-economic situation that led to an 84% depreciation of the Zimbabwe currency against the Pula,” the Group announced.

Nonetheless, the gross profit margin improved from 19.1% to 19.7% owing to a 1.2% improvement in the Botswana segment which the CEO hailed as the most profitable. He said the Board has considered it prudent not to declare a dividend for the period under review to preserve cash.