Supasave acquisition to yield P10m profit for Choppies, Botswana

RETAILER NEWS

Mmegi.bw - Sep 9th, 09:29

The acquisition of Supasave by Choppies is set to improve the latter's revenue by at least P200 million in the next financial year.
 

"We also hope to improve our profitability by at least P10 million per annum," said Otsile Marole, Choppies Group marketing manager.In its abridged unaudited group results for the six months ended December 31st,

Choppies revenue grew strongly by 24 percent to P2.0bn, from P1.6bn mainly due to the company's expansion programme, both in Botswana and South Africa, growth in the 'Choppies' house brands, product mix as well as more efficient management processes.

"The like to like revenue growth from Botswana and South Africa is 8 percent and 14 percent respectively, with the balance attributed to new store openings," Choppies noted, adding that Botswana remains the biggest contributor to revenue at 77 percent.

During the same period, Choppies total assets expanded by 31 percent to P1.2bn, driven by increases in property, plant and equipment, inventories and cash and cash equivalents.

Choppies was successfully granted permission to acquire all issued shares of Supasave PTY LTD and Megasave PTY LTD by the Competition Authority (CA). Choppies vowed to put in a lot of effort to improve the acquisition to its brand power levels.Marole said Choppies would be able to retain the approximately 300 employees of Supasave, and even add more.

"We have managed to retain all the employees, as it was part of the conditions for the merger," Marole said. The retailer also revealed that it opened four stores in the last six months in Botswana, adding retail space of 6,682 square metres. This increased Choppies stores to 53, and total retail space 64,900 square metres and the number of employees to 4,909.

In South Africa, Choppies has 17 stores, with total retail space of 32,411 square metros. The supermarket chain opened a new warehouse in Rustenburg (18,000 sq.mtr.) facilitating efficient operations and a total number of employees 2,002.

In the unaudited results, Choppies says revenue was up 24 percent, gross profit up by 34 percent, net asset value up by 54 percent, operating profit up by 23 percent and net profit after tax up by 22 percent, well in excess of forecasts.

The retailer has enjoyed phenomenal performance on the BSE since listing, driven by strong brand value among investors and anchored by both robust revenue growth and a rosy outlook.

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