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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').
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