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Sefalana rakes in P103 million in H1 profits

Botswana’s first home grown trader and Fast Moving Consumer Goods (FMCG)  retailer Sefalana Holdings Limited presented another impressive set of results for their half year period ended October 2018, announcing  25 percent growth in profits before tax.

The group which operates in five Southern African countries raked in P103.6 million in profits during the period. When presenting the financials this Friday, Sefalana executives told its shareholders that the H1 results are a spillover from another impressive performance by the company during the 2017/18 financial year.

“At the April 2018 year end, we reported to our Shareholders, our best ever results to date. We had focused on cost saving initiatives and identified ways in which to extract additional value from our existing businesses. We had also benefited from the first tranche of returns from our South African investment following over 18 months of refining our model of investment,” said Sefalana Group Managing Director CD Chauhan when giving a background of the group‘s performance .

Chauhan highlighted that Sefalana’s focus during the period under review was very much aligned with the previous financial year’s approach. “We further progressed with overhead cost saving programs and improved processes and structures within the Group, streamlining operations so as to maximize return from these businesses,” he said.

When interpreting the figures, Sefalana Chief Financial Officer Mohamed Osman highlighted that on overall the group exceeded the P2.5 billion turnover threshold, and generated the impressive profit before tax of P103.6 million.  The Group’s revenue grew by 13 percent to P2.6 billion dispatching into 9 percent increase in Gross profits to end the period P152.5 million.  Earnings before interest, tax and amortization (EBITA) ended the six month period under review at P85.5 million, mirroring 21 percent increase when compared to 2017 H1.

Zooming into the Group’s geographical segments and business divisions, Sefalana Cash & Carry Limited under the Botswana basket contributed 55 percent and 23 percent of the Group’s total revenue and profit before tax for the reporting period, respectively. The division turnover amounted to just over P1.4 billion, up by 16 percent when compared to the previous period.  “We experienced increased pressure on margins in both our wholesale and retail operations as we strive to remain competitive and increase market share,” explained Osman.

The Group’s overall profitability for the Botswana division recorded a hike of 2 percent compared to the prior period.  Osman said the slight increase follows a period where the company experience reduction in profitability as a result of heightened competition. In Namibia, one of Sefalana’s emerging market the business under Sefalana Metro banner contributed 31 percent and 24 percent of the total revenue and profit before tax for the period, respectively. Turnover amounted to P797 million, indicating a growth of 9 percent on the prior period. Profit before tax amounted to P25 million, up 13 percent from the prior period.

 “Our operations in Namibia continue to grow despite sluggish economic conditions,” he said. Figures received from Lesotho businesses where  Sefalana has been operating for two years ,  turnover closed the six months period at P191 million mirroring an increase of  14 percent  when gauged against previous period  , contributing just over 7 percent of total Group revenue.

 Sefalana report noted that  margins are however, very slim and the segment achieved a break even EBITA of P0.3 million for the period, and a loss before tax of P3.9 million after taking into account finance charges. “We are delighted to have built a strong presence in the market in a very short space of time however we are disappointed with performance from this unit and look to improve in the second half of the year.” Noted Osman.

Sefalana’s other Trading segments which consist of Commercial Motors and Mechanized Farming Limited contributed 3 percent and 7 percent to Group turnover and profit before tax, respectively. Under the Manufacturing business, Foods Botswana Limited contributed 5 percent and 7 percent to Group turnover and profit before tax for the period respectively. A lower level of profitability was achieved as compared to the prior period, mainly due to timing of orders placed by Government in respect of the various feeding schemes.

The Botswana Stock Exchange listed Group also operates property businesses in Botswana and Zambia. Botswana property portfolio continued on a positive note contributing 1 percent and 14 percent to Group revenue and profit before tax respectively.  Sefalana’s Zambian property business is still struggling with occupancy after significant increase in supply of warehouse and office space in Lusaka over the last few years which resulted in two of the company’s largest tenants moving to alternative premises in April 2017.

 “Since then we have been in search of replacement tenants and have now managed to secure an occupancy rate of around 70%. We will continue to look for suitable tenants for the remaining space. Performance by this segment has therefore slightly improved compared to the previous period,” explained Osman. Going forward Sefalana Group which has been in existence for over 40 years says it will be entering the lucrative catering services business in the next few months.

 “This division will focus on serving the large hospitality industry with frozen foods in wholesale size units. We will continue to pursue process improvements and efficiencies to maximize returns from our existing businesses and look at providing our customer base with a wider product and service offering,”  said Chauhan ,Sefalana Group MD

The Board of Directors of Sefalana Holding Company Limited declared an interim gross dividend of 10 thebe per ordinary share.  “We will also explore and evaluate other neighbouring regions as part of our Regional expansion drive. This will however, continue to be a cautious and measured approach.” He said

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DPP halts JSC, Judge’s back to work plan

25th January 2021
Kebonang

The Directorate of Public Prosecutions (DPP)’s decision to reject and appeal the High Court’s verdict on a case involving High Court Judge, Dr Zein Kebonang has frustrated the Judicial Service Commission (JSC) and Judge Kebonang’s back to work discussions.

JSC and Kebonang have been in constant discussions over the latter’s return to work following a ruling by a High Court panel of judges clearing him of any wrong doing in the National Petroleum Fund criminal case filed by the DPP. However the finalization of the matter has been hanged on whether the DPP will appeal the matter or not – the prosecution body has since appealed.

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BDP rejects Saleshando payment proposal

25th January 2021
MP saleshando

Botswana Democratic Party (BDP) top brass has declined a request by Umbrella for Democratic Change (UDC) to negotiate the legal fees occasioned by 2019 general elections petition in which the latter disputed in court the outcome of the elections.

This publication is made aware that UDC Vice President Dumelang Saleshando was left with an egg on his face after the BDP big wigs, comprising of party Chairman Slumber Tsogwane and Secretary General Mpho Balopi rejected his plea.

“He was told that this is a legal matter and therefore their (UDC) lawyer should engage ours (BDP) for negotiations because it is way far from our jurisdiction,” BDP Head of Communications, Kagelelo Kentse, told this publication.

This spelt doom for the main opposition party and Saleshando who seems not to have confidence and that the UDC lawyers have the dexterity to negotiate these kind of matters. It is not clear whether Saleshando requested UDC lawyer Boingotlo Toteng to sit at the table with Bogopa Manewe, Tobedza and Co, who are representing the BDP to strike a deal as per the BDP top echelons suggested.

“From my understanding, the matter is dealt with politically as the two parties are negotiating how to resolve it, but by far nothing has come to me on the matter. So I believe they are still substantively engaging each other,” Toteng said briefly in an interview on Thursday.

UDC petitioners saddled with costs after mounting an unprecedented legal suit before the court to try and overturn BDP’s October 2019 victory. The participants in the legal matter involves 15 parliamentary candidates’ and nine councillors. The UDC petitioned the court and contested the outcome of the elections citing “irregularities in some of the constituencies”.

In a brief ruling in January 2020, Judge President Ian Kirby on behalf of a five-member panel said: “We have no jurisdiction to entertain these appeals. These appeals must be struck out each with costs including costs of counsel”. This was a second blow to the UDC in about a month after their 2019 appeals were dismissed by the High Court a day before Christmas Day.

This week BDP attorneys decided to attach UDC petitioners’ property in a bid to settle the debts. UDC President Duma Boko is among those that will see their property being attached with 14 of his party members. “We have attached some and we are on course. So far, Dr. Mpho Pheko (who contested Gaborone Central) and that of Dr, Micus Chimbombi (who contested Kgalagadi South) will have their assets being sold on the 5th of February 2021,” BDP attorney Basimane Bogopa said.

Asked whether they met with UDC lawyers to try solve the matter, Bogopa said no and added. “Remember we are trying to raise the client’s funds, so after these two others will follow. Right now we are just prioritising those from Court of Appeal, as soon as the high court is done with taxation we will attach.”

Saleshando, when contacted about the outcomes of the meeting with the BDP, told WeekendPost that: “It would not be proper and procedural for me to tell you about the meeting outcomes before I share with UDC National Executive Committee (NEC), so I will have to brief them first.”

UDC NEC will meet on the 20th of next month to deal with a number of thorny issues including settling the legal fees. Negotiations with other opposition parties- Alliance for Progressives and Botswana Patriotic Front (BPF) are also on the agenda.

Currently, UDC has raised P44 238 of the P565 000 needed to cover bills from the Court of Appeal (CoA). This is the amount in a UDC trust account which is paltry funds equating 7.8 per cent of the overall required money. In the past despite the petitioners maintaining that there was promise to assist them to settle legal fees, UDC Spokesperson, Moeti Mohwasa then said the party has never agreed in no way to help them.

“We have just been put in debt by someone,” one of the petitioners told this publication in the past. “President’s (Duma Boko) message was clear at the beginning that money has been sourced somewhere to help with the whole process but now we are here there is nothing and we are just running around trying to make ends meet and pay,” added the petitioner in an interview
UDC NEC has in December last year directed all the 57 constituencies to each raise a minimum of P10, 000. The funds will be used to settle debts that are currently engulfing the petitioners with Sheriffs, who are already hovering around ready to attach their assets.

The petitioners, despite the party intervention, have every right to worry. “This is so because ‘the deadline for this initiative (P10, 000 per constituency) is the end of the first quarter of this year (2021),” a period in which the sheriffs would have long auctioned the properties.

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Boko-Khama axis viewed with suspicion

25th January 2021
boko-and-khama

President of the Umbrella for Democratic Change (UDC) Duma Boko’s alliance with former President Lt Gen Ian Khama continues to unsettle some quarters within the opposition collective, who believe the duo, if not managed, will once again result in an unsuccessful bid for government in 2024.

While Khama has denied that he has undeclared preference to have Boko remaining as leader of UDC, many believe that the two have a common programme, while other opposition leaders remain on the side-lines.

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