Wrap Text
Abridged unaudited group financial results for the six months ended 31 December 2015
CHOPPIES ENTERPRISES LIMITED
(Incorporated in Botswana)
Registration number 2004/1681)
JSE share code: CHP
BSE share code: CHOPPIES
ISIN: BW0000001072
Tax reference number: C08710401018
(“Choppies” or the “Company”)
ABRIDGED UNAUDITED GROUP FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER, 2015
HIGHLIGHTS
REVENUE +17% GROSS PROFIT +11% PROFIT BEFORE TAX +3%, EBITDA +5%,ASSET VALUE +24%
Mr Ram Ottapathu, CEO, said:
“Choppies is delivering on its growth plan and scaling up well. Our acquisition of 21 Jwayelani stores allows us to strengthen our South African footprint and unlock significant synergies and scale benefits. Choppies initiated operations in Zambia in the reporting period and is excited by supportive market fundamentals. The Kenya acquisition is progressing well according to plan. Our performance over the reporting period was satisfying as we largely maintained margins through a consumer downturn in some markets as well as the rapid store roll-out.”
COMMENTARY
1. Basis of preparation and accounting policies
The financial statements are prepared in accordance with the International Financial Reporting Standards (“IFRS”) (which includes, IAS 34 Interim Financial Reporting), to the extent applicable to Interim Financial Reporting, and in the manner required by Companies Act, 2003 (No. 32 of 2004) of Botswana.
The accounting policies have been applied consistently to all the periods presented in these financial statements.
The financial statements are presented in Pula, which is considered the functional currency.
The interim financial statements were reviewed, but not audited by KPMG.
2. Performance highlights
Revenue up by 17% to P 3.5 billion
Gross profit up by 11% to P 713 million
EBITDA up by 5% to P 216 million
Total number of stores rose to 147 during the period
Total retail space up by 18% to 214,052 Sq Mts.
Zambian operations started on 25 November, 2015
3. Financial overview & review of operations
Region New stores opened Number of stores as on 31 Dec 15
Botswana 5 78
South Africa 4 40
Zimbabwe 8 28
Zambia 1 1
Botswana
Botswana contributed 64% of the revenue. Devaluation of rand which stated in the last financial year continued and still company could maintain good profitability and market share. Profitability in home market improved significantly due to the better yield from the matured infrastructure. We expect this process to continue going forward
South Africa
Trading conditions in the region has been challenging. We opened 4 new stores during the half year bringing up the number to 40. Trading conditions in mining towns were very poor and this resulted in falling behind the profitability marks in the region. Power costs have impacted the profitability. Shift in consumption pattern affected the GP in the whole region which was prevalent in this segment.
Zimbabwe
This region showed a revenue growth of 49% compared to previous year first half. Profitability was mainly affected because of the aggressive pricing strategy of the new stores and pre-operative expenses charges to revenue for 8 new stores opened during the period. Macroeconomic pressure in Zimbabwe continues to put pressure on the spending power of the consumer. Also deflationary trend continue in Zimbabwe due to the usage of hard currency.
Zambia
Started operation in Zambia on 25 November, 2015 with a 1192 sq mtr space at Tafika Commercial Complex, Kanyama , Lusaka and a distribution at Makeni, Lusaka. Another 10 more stores planned during the calendar year 2016.
4. Prospects and post half year acquisitions
Botswana
Presence in home market got extended by adding our 79th store which started operation at Gabane on 4th March 2016. Another two more stores are expected to open before this financial year end.
Kenya
Started operation in Kenya on 13 February, 2016 with the takeover of first store at Kisumu. As of now we have taken over 3 stores. The take over process is expected to be completed by 25 March 2016 after which we will have 10 outlets in Kenya.
Durban – South Africa
Acquired 21 retail stores in Kwazulu-Natal and the Eastern Cape currently owned and operated by Jwayelani Retail Pty Ltd and started operation under the brand “Jwayelani” on 01 March 2016. Jwayelani generated revenues of over R1 billion in the year ended in August 2015 with a gross profit margin of 20.37% and profit before tax margin of 2.84% for the period. Jwayelani gross profit grew by 8.93% in the same period. Please note the figures are unaudited management accounts. The acquisition along with our current foot print should be able to deliver better results going forward. The current foot print should be able to help this region to break even and to profitability.
5. Changes to the Board of Directors
The following changes in the board of directors took place during the period and up to the date of this report:
Name Designation Nature of change Date
Sanooj Pullarote Chief Financial Officer Appointment 10 December, 2015
6. Dividend
No interim dividend has been declared. A final dividend will be declared and distributed after the finalization of the financial statements for the year ended 30 June 2016.
For and on behalf of the Board
F.G.Mogae R. Ottapathu
(Chairman) (Chief Executive Officer)
Registered office Transfer secretaries Auditors
Unit5, Plot 115, Kgale Mews Grant Thorton Business Services (Pty) Ltd KPMG
P O Box 406, Gaborone Acumen Park, Plot 50370, Fairgrounds Plot 67977, Off Tlokweng Rd, Fairgroud Park,
Botswane Botswana P O Box 1519, Gaborone, Botswana
CHOPPIES ENTERPRISES LIMITEDUNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER, 2015
ABRIDGED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
6 months ended 6 months ended 12 months ended
31 December, 2015 31 December, 2014 30 June, 2015
P ' 000 P ' 000 P ' 000
Revenue 3 530 669 3 008 478 5 945 234
Cost of sales (2 816 860) (2 364 470) (4 653 413)
Gross profit 713 809 644 008 1 291 821
Other income 33 459 10 555 8 611
Operating income 747 268 654 563 1 300 432
Expenditure (606 147) (513 987) (1 032 864)
Administrative expenses (491 489) (398 666) (817 993)
Selling and distribution expenses (18 923) (24 626) (48 322)
Other operating expenses (95 735) (90 695) (166 549)
Operating profit before interest and taxation 141 121 140 576 267 568
Interest cost (11 595) (12 201) (28 522)
Interest received 3 948 1 065 4 180
Profit before taxation 133 474 129 440 243 226
Taxation (29 371) (26 189) (45 988)
Profit after taxation 104 103 103 251 197 238
Attributable to :
Owners of the company 104 350 100 572 202 825
Non-controlling interests (247) 2 679 (5 588)
Other comprehensive income:
Items that will subsequently be reclassified to profit or loss
Foreign currency translation
differences from foreign operations (13 631) (6 996) (16 068)
Attributable to :
Owners of the company (15 702) (2 052) (16 542)
Non-controlling interests 2 071 (4 944) 474
Profit and total comprehensive income 90 472 96 255 181 170
Attributable to :
Owners of the company 88 648 98 520 186 284
Non-controlling interests 1 824 (2 265) (5 114)
Earnings per share (Thebe) 8.08 8.57 17.11
Headling earning per share (Thebe) 6.84 8.37 16.92
Dividend per share (Thebe) 4.88 4.25 4.51
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
31 December, 2015 31 December, 2014 30 June, 2015
P ' 000 P ' 000 P ' 000
Assets
Non current assets 1 446 489 1 222 951 1 269 312
Plant and equipment 875 003 734 519 746 049
Deferred taxation 27 637 21 464 19 572
Investments in new projects 50 180 12 926 30 165
Goodwill 493 669 454 042 473 526
Current assets 1 204 514 919 811 1 149 383
Inventories 674 406 543 181 535 653
Investments 3 3 3
Advances and deposits 57 715 48 856 66 023
Trade and other receivables 215 748 203 726 186 148
Amounts due from related entities 7 645 5 629 17 735
Cash and cash equivalents 248 997 118 416 343 821
Total assets 2 651 003 2 142 762 2 418 695
Equity and liabilities
Equity 1 479 020 912 588 1 451 538
Share capital 875 476 421 474 875 476
Preference shares 86 85 86
Retained earnings 629 646 486 000 588 286
Non-controlling Interests 3 859 4 884 2 035
Foreign currency translation reserve (30 047) 145 (14 345)
Non current liabilities 331 925 401 111 312 429
Long term borrowings 288 442 363 044 273 591
Deffered lease liabilities 43 483 38 067 38 838
Current liabilites 840 058 829 063 654 728
Current portion of long term borrowings 84 850 102 984 79 185
Current portion of deferred lease liabilities 4 492 3 554 4 805
Bank overdrafts 27 329 82 206 62 566
Trade and other payables 695 374 587 135 453 129
Amounts due to related entities 7 687 36 266 38 301
Taxation payable 20 326 16 918 16 742
Total equity and liabilities 2 651 003 2 142 762 2 418 695
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Stated Capital Preference Shares Retained Earnings Foreign Currency Non-Contolling Total
Translation Reserve Interest
P ' 000 P ' 000 P ' 000 P ' 000 P ' 000 P ' 000
Balance as on 30 June 2014 (Audited) 421 474 85 438 418 2 197 7 149 869 323
Total comprehensive income for the year - - 100 572 (2 052) (2 265) 96 255
Profit 100 572 - - - 2 679 103 251
Other comprehensive income - - - (2 052) (4 944) (6 996)
Transactions with owners - - (52 990) - - (52 990)
Dividend declared - - (52 990) - - (52 990)
Balance as on 31 Dec 2014 (Unaudited) 421 474 85 486 000 145 4 884 912 588
Total comprehensive income for the year - - 102 286 (14 490) (2 849) 84 947
Profit - - 102 286 - (8 267) 94 019
Other comprehensive income - - - (14 490) 5 418 (9 072)
Transactions with owners 454 002 1 - - - 454 003
Issue of ordinary shares 454 002 - - - - 454 002
Issue of preference shares - 1 - - - 1
Balance as on 30 June 2015 (Audited) 875 476 86 588 286 (14 345) 2 035 1 451 538
Total comprehensive income for the year - - 104 350 (15 702) 1 824 90 472
Profit - - 104 350 - (247) 104 103
Other comprehensive income - - - (15 702) 2 071 (13 631)
Transactions with owners - - (62 990) - - (62 990)
Issue of ordinary shares - - - - - -
Dividend declared - - (62 990) - - (62 990)
Issue of preference shares - - - - - -
Balance as on 31 December 2015 (Unaudited) 875 476 86 629 646 (30 047) 3 859 1 479 020
ABRIDGED CONSOLIDATED STATEMENT OF CASHFLOWS
(Unaudited) (Unaudited) (Audited)
6 months ended 6 months ended Year ended
31 December, 2015 31 December, 2014 30 June, 2015
P ' 000 P ' 000 P ' 000
Net cashflows generated from/(used in)operating activities 147 113 (14 660) (243)
Net cashflows used in investment activities (215 621) (184 446) (278 247)
Net cashflows generated from financing activities 8 921 177 477 501 906
Net movement in cash and cash equivalents (59 587) (21 629) 223 416
Cash and cash equivalents at the begining of the period 281 255 57 839 57 839
Cash and cash equivalents at the end of the period 221 668 36 210 281 255
ABRIDGED SEGMENTAL RESULTS
Particulars Botswana South Africa Zimbabwe Zambia Total
P ' 000 P ' 000 P ' 000 P ' 000 P ' 000
Six months ended 31 December 2015 (Unaudited)
Statement of profit or loss and other comprehensive income
Revenue:
Trading income 2 265 942 672 697 586 553 5 477 3 530 669
Other income 30 880 1 834 745 - 33 459
Total segment revenue 2 296 822 674 531 587 298 5 477 3 564 128
Reportable segment profit/(loss) before taxation 174 212 (40 063) 952 (1 627) 133 474
Reportable segment EBITDA 216 235 (13 324) 14 121 (1 492) 215 540
Statement of financial position
Reportable segment assets 1 522 831 541 131 560 027 27 014 2 651 003
Reportable segment liabilities 614 661 223 070 324 790 9 462 1 171 983
Six months ended 31 December 2014 (Unaudited)
Statement of profit or loss and other comprehensive income
Revenue:
Trading income 1 991 840 622 301 394 337 - 3 008 478
Other income 9 285 1 067 203 - 10 555
Total segment revenue 2 001 125 623 368 394 540 - 3 019 033
Reportable segment profit/(loss) before taxation 129 762 (8 037) 7 715 - 129 440
Reportable segment EBITDA 176 807 13 942 15 073 - 205 822
Statement of financial position
Reportable segment assets 1 317 120 467 403 358 239 - 2 142 762
Reportable segment liabilities 374 233 511 870 344 071 - 1 230 174
Year ended 30 June 2015 (Audited)
Statement of profit or loss and other comprehensive income
Revenue:
Trading income 3 806 193 1 275 589 863 452 - 5 945 234
Other income 5 220 2 322 1 069 - 8 611
Total segment revenue 3 811 413 1 277 911 864 521 - 5 953 845
Reportable segment profit/(loss) before taxation 253 761 (23 712) 13 177 - 243 226
Reportable segment EBITDA 330 645 23 052 30 349 - 384 046
Statement of financial position
Reportable segment assets 1 510 387 509 705 398 603 - 2 418 695
Reportable segment liabilities 556 802 144 754 265 601 - 967 157
Notes to financial statements
for the period ended 31 December 2015
In Pula
Group
Headline Earnings Per Share Dec-15 Dec-14 Jun-15
Basic Earnings(Profit after tax
attritutable
to owners of the company) 104 350 340 100 571 592 202 825 819
Remeasurements:-
Profit on sale of asset (20 521 841) (2 962 688) (2 727 884)
Tax effect on remeasurements 4514805 658216 600135
Remeasurements(Net of Tax) (16 007 036) (2 304 472) (2 127 749)
Headline earnings 88 343 303 98 267 120 200 698 070
Number of shares 1291628341 1174207583 1185467108
Headline earnings per share
(Basic & Diluted) In thebe 6.84 8.37 16.93
Earnings per share
(Basic & Diluted) In thebe 8.08 8.57 17.11
The Company's primary listing is on the Botswana Stock Exchange and its secondary listing is on the Johannesburg Stock Exchange.
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