CHOPPIES ENTERPRISES LIMITED - Choppies Enterprises : abridged unaudited group financial results for the six months ended 31 December 2017

Release Date: 26/04/2018 08:00
Code(s): CHP
 
Wrap Text
Choppies Enterprises : abridged unaudited group financial results for the six months ended 31 December 2017

Choppies Enterprises Limited
(Registration number 2004/1681)
BSE Share code : CHOPPIES (Primary Listing)
JSE share code : CHP  ( Secondary Listing)
ISIN: BW0000001072
("Choppies" or the "Company")

CHOPPIES ENTERPRISES : ABRIDGED UNAUDITED GROUP FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

Key information
     -  Revenue up 22%
     -  Gross profit up 23%
     -  EBITDA up 33%
     -  PAT up 22%
     -  Asset value up 18%
     -  EPS up 21%
     -  HEPS up 19%
     -  Store count up 33
     -  Retail space up 17%

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
                                                                                                                      (Unaudited)                   (Unaudited)                     (Audited)
                                                                                                                   6 months ended                6 months ended               12 months ended
                                                                                                                31 December, 2017             31 December, 2016                 30 June, 2017
                                                                                                                          P ' 000                       P ' 000                       P ' 000

Revenue                                                                                                                 5 761 505                     4 713 772                     8 852 397
Cost of sales                                                                                                          (4 639 137)                   (3 798 231)                   (6 979 223)
Gross profit                                                                                                            1 122 368                       915 541                     1 873 174
Other income                                                                                                               29 324                        21 728                        39 749
Operating income                                                                                                        1 151 692                       937 269                     1 912 923

Expenditure                                                                                                            (1 027 717)                     (847 705)                   (1 773 975)
Administrative expenses                                                                                                  (832 730)                     (678 769)                   (1 430 322)
Selling and distribution expenses                                                                                         (24 095)                      (29 952)                      (56 416)
Other operating expenses                                                                                                 (170 892)                     (138 984)                     (287 237)

Operating profit before interest                                                                                          123 975                        89 564                       138 948
                                                                                                                                                                        
Interest cost                                                                                                             (32 658)                      (18 498)                      (53 889)                                                                                                         
Interest income                                                                                                             1 519                         2 221                        10 930
Profit before taxation                                                                                                     92 836                        73 287                        95 989                     
Taxation                                                                                                                  (25 179)                      (17 732)                      (21 349)
Profit for the period                                                                                                      67 657                        55 555                        74 640
Attributable to:
   Owners of the company                                                                                                   71 522                        58 383                        83 923
   Non-controlling interests                                                                                               (3 865)                       (2 828)                       (9 283)

Other comprehensive income
Foreign currency translation differences from foreign operations                                                            4 853                        13 529                         3 186
Attributable to:
   Owners of the company                                                                                                    4 498                        14 625                         5 721
   Non-controlling interests                                                                                                  355                        (1 096)                       (2 535)

Profit and total comprehensive income                                                                                      72 510                        69 084                        77 826
Attributable to:
   Owners of the company                                                                                                   76 020                        73 008                        89 644
   Non-controlling interest                                                                                                (3 510)                       (3 924)                      (11 818)

Basic earnings per share - Thebe                                                                                             5.49                          4.52                          6.50
Headline earnings per share - Thebe                                                                                          5.36                          4.52                          6.68


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                                                      (Unaudited)                   (Unaudited)                     (Audited)
                                                                                                                31 December, 2017             31 December, 2016                 30 June, 2017
                                                                                                                          P ' 000                       P ' 000                       P ' 000 
Assets

Non-current assets                                                                                                      2 009 010                     1 835 754                     1 874 559
   Plant and equipment                                                                                                  1 248 729                     1 182 159                     1 206 087 
   Deferred taxation                                                                                                      125 950                        68 043                       105 267
   Investments in new projects                                                                                            119 813                        79 022                        46 651
   Goodwill                                                                                                               514 518                       506 530                       516 554

Current assets                                                                                                          1 923 853                     1 501 170                     1 547 005
   Inventories                                                                                                          1 305 735                       947 306                     1 006 479
   Investments                                                                                                                  3                             3                             3
   Advances and deposits                                                                                                  100 266                        67 276                        93 638
   Taxation refundable                                                                                                      1 875                             -                         2 045
   Trade and other receivables                                                                                            317 987                       258 665                       238 043
   Amounts due from related entities                                                                                        3 805                         6 913                        19 051
   Cash and cash equivalents                                                                                              194 182                       221 007                       187 746

Total assets                                                                                                            3 932 863                     3 336 924                     3 421 564

Equity and liabilities

Equity                                                                                                                  1 563 728                     1 506 147                     1 514 889
   Stated capital                                                                                                         906 196                       875 476                       906 196
   Preference shares                                                                                                           87                            87                            87
   Retained earnings                                                                                                      725 763                       656 676                       682 216
   Treasury shares                                                                                                        (30 720)                            -                       (30 720)
   Non-controlling interests                                                                                              (12 417)                       (5 317)                      (13 211)
   Foreign currency translation reserve                                                                                   (25 181)                      (20 775)                      (29 679)

Non-current liabilities                                                                                                   652 245                       519 015                       670 695
   Long term borrowings                                                                                                   530 848                       453 000                       557 546
   Deferred taxation                                                                                                       38 283                             -                        38 298
   Deferred lease liabilities                                                                                              83 114                        66 015                        74 851

Current liabilities                                                                                                     1 716 890                     1 311 762                     1 235 980
   Current portion of deferred lease liabilities                                                                            8 845                         2 882                         5 988
   Bank overdrafts                                                                                                         36 849                        51 307                       110 977
   Trade and other payables                                                                                             1 474 065                     1 102 510                       994 055
   Amounts due to related entities                                                                                         12 609                        15 182                         1 499
   Taxation payable                                                                                                        28 437                        13 299                         9 370
   Current portion of long term borrowings                                                                                156 085                       126 582                       114 091

Total equity and liabilities                                                                                            3 932 863                     3 336 924                     3 421 564


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Particulars                                   Stated capital     Preference shares     Retained earnings      Treasury Shares     Foreign currency     Non-controlling       Total
                                                                                                                                  translation reserve  interest     
                                                     P ' 000               P ' 000               P ' 000             P ' 000                P ' 000          P ' 000       P ' 000

Balance at 30 June 2016 (Audited)                    875 476                    87               634 823                  -                 (35 400)          (1 393)    1 473 593

Total comprehensive income for the period                  -                     -                58 383                  -                  14 625           (3 924)       69 084
(6 months)
   Profit                                                  -                     -                58 383                  -                       -           (2 828)       55 555
   Other comprehensive income                              -                     -                     -                  -                  14 625           (1 096)       13 529

Transactions with Owners                                   -                     -               (36 530)                 -                       -                -       (36 530)
   Dividend declared                                       -                     -               (36 530)                 -                       -                -       (36 530)

Balance as at 31 December 2016 (Unaudited)           875 476                    87               656 676                  -                 (20 775)          (5 317)    1 506 147

Total comprehensive income for the period (6 months)       -                     -                25 540                  -                  (8 904)          (7 894)        8 742
   Profit                                                  -                     -                25 540                  -                       -           (6 455)       19 085
   Other comprehensive income                              -                     -                     -                  -                  (8 904)          (1 439)      (10 343)

Transactions with Owners                              30 720                     -               (62 990)           (30 720)                      -                -             -
   Issue of ordinary shares                           30 720                     -                     -                  -                       -                -        30 720
   Purchase of treasury shares                             -                     -                     -            (30 720)                      -                -       (30 720)

Balance as at 30 June 2017 (Audited)                 906 196                    87               682 216            (30 720)                (29 679)         (13 211)    1 514 889

Total comprehensive income for the period (6 months)       -                     -                71 522                  -                   4 498           (3 510)       72 510
   Profit                                                  -                     -                71 522                  -                       -           (3 865)       67 657
   Other comprehensive income                              -                     -                     -                  -                   4 498              355         4 853

Transactions with Owners                                   -                     -               (27 975)                 -                       -            4 304       (23 671)
   Equity contribution in subsidiary                       -                     -                     -                  -                       -            4 304         4 304
   Dividend declared                                       -                     -               (27 975)                 -                       -                -       (27 975)

Balance as at 30 December 2017 (Unaudited)           906 196                    87               725 763            (30 720)                (25 181)         (12 417)    1 563 728


SEGMENTAL RESULTS

Particulars                                          Botswana          South Africa              Zimbabwe         Other regions                 Total
                                                      P ' 000               P ' 000               P ' 000               P ' 000                P '000
Six months ended 31 December, 2017 (Unaudited)
Statement of profit or loss and other comprehensive
income
 Revenue:
   Trading income                                   2 299 262             2 126 611               869 084               466 548             5 761 505            
   Other income                                        17 813                 9 221                   603                 1 687                29 324 

Total segmental revenue                             2 317 075             2 135 832               869 687               468 235             5 790 829

Reportable segment gross profit                       517 053               395 312               143 264                66 739             1 122 368

Reportable segment profit/(loss) before taxation      113 908                 4 567                16 490               (42 129)               92 836

Reportable segment depreciation                        56 199                43 632                13 929                13 170               126 930                 

Reportable segment EBITDA                             184 748                58 798                33 399               (26 041)              250 904

Reportable segment profit/(loss) after taxation        87 669                 3 004                12 403               (35 419)               67 657

Statement of financial position
 Reportable segment assets                          1 478 033             1 428 491               553 202               473 137             3 932 863
 Reportable segment liabilities                     1 041 951               861 612               264 820               200 752             2 369 135
Six months ended 31 December, 2016 (Unaudited)
Statement of profit or loss and other comprehensive
income
 Revenue:
   Trading income                                   2 286 333             1 493 708               697 595               236 136            4 713 772      
   Other income                                        15 324                 4 532                 1 252                   620               21 728                   

Total segmental revenue                             2 301 657             1 498 240               698 847               236 756            4 735 500          

Reportable segment gross profit                       479 979               269 702               128 211                37 649              915 541                  

Reportable segment profit/(loss) before taxation      110 050               (23 323)               14 140               (27 580)              73 287                 

Reportable segment depreciation                        44 855                34 258                12 897                 7 785               99 795             

Reportable segment EBITDA                             165 779                13 525                29 899               (19 843)             189 360           

Reportable segment profit/(loss) after taxation        81 282               (16 536)               10 442               (19 633)              55 555            

Statement of financial position
 Reportable segment assets                          1 478 862             1 035 555               556 798               265 709            3 336 924             
 Reportable segment liabilities                       843 075               608 072               263 579               116 051            1 830 777

                                          
Year ended 30 June 2017 (Audited)                                                     
Statement of profit or loss and other comprehensive
income
 Revenue:
   Trading income                                   4 044 027             2 864 087             1 366 116               578 167            8 852 397            
   Other income                                        26 446                10 077                 1 592                 1 634               39 749 

Total segmental revenue                             4 070 472             2 874 164             1 367 708               579 801            8 892 145

Reportable segment gross profit                       967 047               582 455               241 635                82 037            1 873 174

Reportable segment profit/(loss) before taxation      212 002               (56 528)               11 124               (70 609)              95 989

Reportable segment depreciation                        92 294                72 008                20 668                18 239              203 209                 

Reportable segment EBITDA                             321 064                33 386                39 228               (51 522)             342 156

Reportable segment profit/(loss) after taxation       164 557               (43 955)                6 038               (52 000)              74 640

Statement of financial position
 Reportable segment assets                          1 478 828             1 067 879               508 902               365 955            3 421 564
 Reportable segment liabilities                       920 080               596 626               233 234               156 735            1 906 675
  

CONSOLIDATED STATEMENT OF CASH FLOWS

Particulars                                                                                                          (Unaudited)                   (Unaudited)                     (Audited)
                                                                                                                  6 months ended                6 months ended               12 months ended
                                                                                                               31 December, 2017             31 December, 2016                  30 June 2017
                                                                                                                         P ' 000                       P ' 000                       P ' 000

Net cash flows generated from operating activities                                                                       332 044                       243 358                       211 657
Net cash flows (used in)/ investment activities                                                                         (234 118)                     (168 471)                     (286 366)
Net cash flows generated from financing activities                                                                       (17 362)                       42 727                        99 392
Movement in cash and cash equivalents                                                                                     80 564                       117 614                        24 683
Cash and cash equivalents at begining of the period                                                                       76 769                        52 086                        52 086
Cash and cash equivalents at end of the period                                                                           157 333                       169 700                        76 769         
                     
COMMENTARY           
                                                        
1. Basis of preparation and accounting policies
The abridged unaudited financial information for the six months ended 31 December 2017 is prepared in accordance with 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 the Companies Act, 2003 (No.32 of 2004) of Botswana.  
The accounting policies have been applied consistently to all periods in the financial information presented. The financial information is presented in Botswana Pula, which is considered the functional currency.

2. Performance highlights compared to half year ended 31 December 2016
Revenue up by 22% to P 5.8 billion
Gross profit up by 23% to P 1.1 billion
33 new stores were added during the period; total number of stores now 235
Total retail space up by 17% to 340 973 Sq m
Commenced operations in Mozambique and Namibia

3. Financial overview & review of operations

Botswana
Botswana contributed 40% to Group revenue. Despite the subdued economic environment in the country, we maintained our market share and continued to improve our efficiencies. Segmental revenue increased by 6% and EBITDA by 11% compared to the half year ended 31 Dec 16 (herein after referred to as corresponding period).  

South Africa
Significant improvement in the North West stores resulted in like for like revenue growth of 43%. This growth has brought us to profitability in this region and we expect this trend to continue in the second half of FY 2018. Segmental revenue increased by 43% and EBITDA by 335% compared to the corresponding period. In KZN, Choppies acquired a further 8 stores effective from 1 November 2017. Increased benefits of scale and other efficiencies will improve further as we expand our footprint in this region.

Zimbabwe
We continue to perform better in this market, in spite of depressed economic conditions. Revenue grew by 25% and EBITDA BY 12% compared to the corresponding period.

Other regions
The opening of new stores and distribution centres in other regions is in accordance with strategies adopted by the board. In the six month period 3 stores were added in Zambia.

Overall performance improved in other regions but we are yet to achieve profitability.


4.  Dividend
The company has a policy of declaring dividends once a year based on the annual results.


5. Delay in publication of results for the six months ended 31 December 2017

Shareholders are referred to the announcement released on the Stock Exchange News Service and X News on 23 March 2018. The release of the results for the period, which was originally scheduled for 21 March 2018, was delayed after the board of directors instructed management to perform more detailed procedures on verification and valuation of inventory in conjunction with the company’s external auditor, PricewaterhouseCoopers.

This process was completed during April 2018. No material issues were identified and the additional procedures did not result in any changes to the financial results.


Headline Earnings per Share Computation
Basic Earnings                             71 522
Remeasurements 
Loss on disposal of asset                  (2 272)
Tax Impact                                    594 
Headline Earnings                          69 844
Number of shares for basic earnings 1 303 628 341                     
Basic EPS Thebe                             5.49
HEPS Thebe                                  5.36


Botswana
25 April 2018

Sponsor
RAND MERCHANT BANK LIMITED( A division of First Rand Bank)

REGISTERED OFFICE
Unit 5, Plot 115, Kgale Mews.
P.O. Box 406,
Gaborone, Botswana.

TRANSFER SECRETARIES
Grant Thornton Business Services (Pty) Ltd.
Acumen Park, Plot 50370, Fairgrounds Office Park.
P.O. Box 1157, Gaborone, Botswana.

AUDITORS
PricewaterhouseCoopers
Plot 50371, Fairground Office Park,
Gaborone, Botswana.
Date: 26/04/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story