The Sefalana Group has started the year on a high note, reporting a profit before tax of P83.1 million and an interim dividend of 10 thebe per share in its unaudited financial results for the half year ended 31st October 2017. The profit was increasing from the P82 million recorded during the corresponding period the prior year.
With a total asset value of P2.44 billion, the Group has expanded to neighbouring countries, Namibia, Zambia and South Africa and this is boosting its revenues. Its revenue over the period under review escalated from P2 billion to P2.3 billion. It however, registered Gross profit of P139.4 million, down 8% on prior period.
The Group however, faced the persisting difficult trading conditions in its Botswana market, which it had experienced in the previous financial year. “Spending remained significantly lower than in previous years as consumer spending continued to be cautious. This economic environment has put pressure on a number of industries in Botswana, some of which have responded with a reduction in employees in an attempt to reduce costs. We are proud to report that we have not had to carry out large retrenchment programs as we are optimistic that the economy will show signs of recovery over the next 12-18 months and do not believe in a short term measure to resolve the longer term challenges,” the Group said it its financial statement.
The heavy dependence of its manufacturing business on Government is dealing it huge blow as the awarding of tenders tend to take time when their businesses should be running and making money. “Our manufacturing businesses are heavily dependent on Government tenders and to the extent that there have been delays in awarding of the annual tenders, this has adversely impacted us. We have however, managed to maintain a good level of profitability at both our Foods Botswana Milling and Beverages operations by growing our house brand product ranges,” they said.
The Chandra Chauhan-led Group, which is chaired by former vice president, Ponatshego Kedikilwe, says its focus will continue to be on its core segments that generate strong returns for the Group. “We are leaders in Cash & Carry in Botswana, Namibia and Lesotho and will continue to ensure we provide the market with the best possible offering. We are also growing our Retail business and establishing a strong presence in the local market as Sefalana Shopper now increasingly becomes a store of choice for the Botswana market,” the statement said.
It concluded by saying; “We have made a success of our entry into Namibia and look to do the same in Lesotho. Our expansion into South Africa is expected to elevate the Group’s profitability as reported above. We are optimistic about this new territory and look to continued success in our Regional expansion strategy.