Rédaction Africa Links 24 with The Africa Links 24
Published on 2024-03-06 17:06:43
Choppies Group has reported success in the midst of economic challenges in Zimbabwe, attributing its performance to the acquisition of Kamoso Group. This strategic move significantly impacted the group’s financial performance for the six months ended 31st December 2023, leading to a 21.3 percent increase in retail sales.
The acquisition of Kamoso included 100 liquor and hardware stores, resulting in a notable volume growth of 8 percent across the Group’s segments. However, the economic situation in Zimbabwe had a negative impact on the segment’s performance, contrasting with the overall positive trajectory of the Group.
Despite facing challenges, Choppies reported a volume increase in like-for-like stores of 1.6 percent, with price growth inching up by 0.6 percent, primarily affected by weaker translation exchange rates. Operational efficiency and strategic acquisitions were key factors in the impressive 28.4 percent increase in operating profit (EBIT) from P141 million to P181 million. Adjusted EBIT, which excludes foreign exchange variances and other non-operational items, saw a remarkable increase of 37.9 percent.
The Group’s financial stewardship is evident in its handling of net finance costs, which rose due to finance costs related to the Kamoso acquisition. Strategic debt reduction was also a focus for Choppies, with a net decrease of P269 million achieved through debt settlement and a rights issue.
The Botswana segment stood out for its resilience in a tough economic environment, posting a 9.4 percent increase in sales and a 6.7 percent growth in like-for-like sales. The segment’s success was attributed to effective inventory management and successful execution of promotional events like the 20th Big Birthday Bonanza.
Despite competitive pressures, the Botswana segment managed to improve gross profit margins by 60 basis points, highlighting Choppies’ competitive edge in the market. The segment’s dominance in the market within just 20 years showcases its strong performance and growth.
Overall, Choppies Group’s strategic acquisitions, operational efficiency, and financial management have contributed to its success amidst economic challenges. The acquisition of Kamoso Group has played a significant role in driving retail sales growth and expanding the group’s footprint. Despite facing headwinds in Zimbabwe, Choppies has demonstrated resilience and growth, positioning itself as a key player in the retail industry.
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