Choppies reports strong results following South Africa exit

CEO Ram Ottapathu: Choppies has traded strongly following its exit from non-performing markets.

Choppies Enterprises achieved strong results for the year ended June 2020 following its withdrawal from non-performing markets like South Africa.

Despite the impact of Covid-19, which is estimated to have cost Choppies BWP190 million in revenue, the company managed to increase its revenue by 1 percent to BWP5,421 billion. The enterprise’s gross profit also increased by 3 percent to BWP1,253 billion.

According to a statement by the company, the increase comes off the back of a period of consolidation and restructure, improved corporate governance and the withdrawal from non-performing operations in markets including South Africa, Kenya, Tanzania and Mozambique.

Choppies CEO Ram Ottapathu said:

“These are solid results. Our continuing businesses are resilient. We have traded strongly following the exit from certain markets and the impact of Covid-19 and hyperinflation in Zimbabwe.”

He explained that the company is particularly pleased by the strong growth in EBITDA and its ability to consolidate its continuing business in Botswana, Zambia, Namibia and Zimbabwe.

The results included:

  • EBITDA improved by 109%;
  • operating profit of BWP208 million grew by 126%;
  • operating profit of BWP208 million grew by 126%;
  • profit for the period grew by 1,314% to BWP99,7 million (BWP7 million in 2019);
  • earnings per share grew by 767% to 8,1 thebe; and
  • basic headline earnings per share increased by 227%.

Governance

Ram said that the Choppies board continues to act in the best interests of the business and shareholders, with a strong focus on debt reduction. He assured shareholders that all recommendations on corporate governance have been implemented.

“Recognised corporate governance policies and structures are now in place. This continues to be the main focus area for the board. I am confident that the actions we have taken will reposition Choppies as the preferred retailer for mass grocery and financial services in the countries in which we operate, thereby maximising shareholder value.”

He announced that the group had a new CFO in place, while an experienced retailer advisor has also been appointed.

Future growth

According to the statement, a “Shared-Value Strategy” is central to the group’s future growth plan. This involves working beneficially with all stakeholders including developing local businesses, caring for the environment and population upskilling.

Ram explained:

“We are actively supporting farmers’ growth and quality by providing platforms and knowledge that bolster their financial and technical expertise. We also make our transport capacity available to local businesses to help small producers reach new markets whenever we can.”

Choppies is helping to train citizens in basic skills and crafts with a view to accelerating the productivity of its employees. And the group is partnering with universities to provide advanced courses in information technology and retail management.

“All of this helps develop people and skills to the benefit of the countries in which we operate,” Ram said.