Choppies sales jump to P4.7 billion

Leading regional retailer Choppies has enjoyed a 19.3 per cent jump in retail sales for the six months ending December 2024; posting P4 677 million compared to P3 921 million in the corresponding period. This was on the back of a 15.5 per cent growth in foot fall – individual buyers that entered Choppies stores across its various markets of Botswana, Namibia and Zambia. Group CEO Ramachandran Ottapathu said that they are well focused on ensuring the company improves performance further in its three markets of Botswana, Namibia and Zambia. “We are well focussed on our markets – Botswana which is a matured market has continued to do well. Namibia has started breaking even. We are about five stores away from reaching the critical mass in Namibia which will then increase profitability. Zambia has showed a decent profit despite power disruptions and devaluation volatility,” said Ottapathu. Going forward, he said, they will step up organic growth and enhance retail innovations. 

SALES GROWTH 

The retailer’s Group Chief Financial Officer Minnesh Rajcoomar when acknowledging the foot fall growth declared: “This is phenomenal because it means we are taking the market away from our competitors. We are doing a lot of things right and this is bringing us more customers”. 

Among other initiatives that have attracted customers to Choppies stores in the annual birthday bonanza where customers win many prizes including luxury vehicles. For the period under review a lucky customer drove away with a Land Cruiser. 

Rajcoomar hailed the opening of new 26 stores that spurred volume growth for the increase in overall sales. 

”Choppies segments saw volume growth of 14.5% and achieved price growth of 3.7%. Choppies segments sales for like-for-like stores increased by 15.1%,” said the company directors in a commentary accompanying the results that also showed that Operating profit (EBIT) increased by 6.1% from P179 million to P190 million. 

“Shareholders need to understand that because we are highly diversified, we are able to continue to perform well because while some segments could drag the group down others are able to stand in and perform well,” he said, pointing to the resilience of the business and projecting that they will do even better in the future. 

Rajcoomar’s optimism is well placed since they have recently sold their Zimbabwean operations which has dragged down the group’s overall performance for years. 

Their concern now is in improving the performance of the recently acquired Liquorama to enhance its market share. “This liquor industry is dominated by liquor wholesalers who are competing with retailers. We are battling with competition and at times supplies issues but we believe we will be able to turn the tide,” he said. 

He said they are also working on the Builders Mart brand to scale up its efficiency and presence. “We have prepared the ground for this brand to begin to perform better and we shall be opening about five Builders Mart shops in Namibia in the next 12 months,” he said. 

He further talked in glowing terms about their ‘On the Go’ stores which are run as 24 hours convenience stores set up in fuel stations as performing very well. 

“Our cash generation remains very strong. Our free cash went up 10 per cent from P251 million to P278 million. This places us in a good position to borrow more to fund our expansion programme or new products development,” he said. 

Rajcoomar is happy with their fintech innovations – hailing their Payzana payments platform as great innovation which is being fully embraced by customers. 

MARKETS 

In terms of country performance Botswana sales “increased by 16.0% with like-for-like sales growth of 11.5%, as the business continued to show strong resilience in an increasingly challenging economic environment. Sales increased to P2 905 million (2023: P2 505 million) supported by volume growth of 13.0%, price inflation of 3.7% and six new stores”. 

Namibia posted a sales growth of 51.0%, moving from a loss last year of P4 million to a profit this year of P6 million. “As the new stores reach full potential, profitability has improved. There has been a marked improvement in the gross profit rate as we are more precise in our promotional activity, and we completed the implementation of our inventory optimisation system during the last quarter and will start seeing the benefits of better managed availability in the balance of the six months of financial year 2025,” said the directors. 

Zambia enjoyed a sales growth of 12.4% in Pula value equating to growth of 37.8% in Kwacha value. “Six new stores were opened during the year. The Kwacha has experienced a 21% decline against the Pula since the end of December 2023, primarily due to a drop in metal prices and production in this copper-producing nation. The recent droughts are a challenge for power generation,” the directors said. 

DIVIDEND 

Due to this good performance shareholders will receive an interim dividend of 1.6 Thebe per share in May. This according to Rajcoomar translates into a P30 million total pay out for shareholders.