Research Consultant, Larry Patterson has advised Botswana to challenge itself and embrace extensive game ranching, expand and guide it for the country to reap its environmental and economic benefits.
Patterson criticized Botswana for remaining blinkered and stuck to a vision of high revenues from a decreasing wildlife resource base in a deteriorating but ever expanding scenario of photographic tourism.
Addressing Botswana Symposium on Wetlands and Environment 2015, Patterson advised that diversification of the economy using ecological platforms is readily attainable through game ranching.
Patterson explained that among opportunities which Botswana needs to grasp is to expand the game ranching estate by providing citizens with an affordable way into the industry. He stressed that more tribal land could be made available for game ranching and seed populations of suitable species could be provided from the parks and game ranches.
“The major part of the so called WMAs in some districts is defunct and could be more productive and conservationist as game ranches.”
He added that swathes of land surrounding some of the country’s parks and reserves which are misguidedly being allocated for photographic tourism would be much more suited to game ranching especially through community owned conservancies.
Patterson also shared that another way to greatly enhance the potential of game ranching is through breeding rare and valuable species. He added that these include sable, roan and tsessebe which occur in exploitable numbers in certain areas of Pandamatenga and Ngamiland.
“The veterinary constraints have been demonstrated to be easily overcome and we now only need the political will. Most of all we must capitalize on the potentially immense value of a single species being the buffalo.”
Patterson underscored that the recent ‘feeding frenzy’ over coloured wildebeest seems to be spilling over into other species adding that red coloured individuals which originated in the Limpopo valley are now called ‘golden gnus’ and are bred and sold fairly in South Africa.
“Prices for adult animals have stabilized at around R500 000 and the so called ‘splits’ which allegedly have one red parent fetch prices exceeding R100 000. ‘King wildebeest’ which are rarer resemble an ugly palamino, but sell for millions. Black impala are sold for over R200 000 while black saddled impala are rated for R750 000 and there are high premiums for coloured and white (not albino) animals such as springbok, gemsbok and kudu.”
Patterson advised that Botswana may have reservations because of suggestions from scientists and conservationists but it must acknowledge the commercial opportunities which these animals present.
The research consultant warned that Botswana should consider recent scenarios in the industry in South Africa and guard against blindly following developments that have damaging environmental consequences.
“The trend to subdivide ranches into sub units as small as 100ha camps in order to breed colour variants such as black impala is not game ranching. It is intensive stud breeding and stock rearing with ecological costs and dubious conservation value.”
Patterson expressed that the recent market driven phenomenal demand for colour variants and resulting spectacular escalation in value is the main cause driving these unwelcome developments. He informed that colour variants of species are not in themselves a biological threat but they are merely a result of recessive genes and were uncommon because they are more susceptible to predation under extensive natural conditions.
Despite claims of returning considerable land holdings to wildlife being valid and can be substantially expanded, Patterson has refuted that there are no conservation benefits from massive proliferation of game proof fencing which fragments viable ecological units. He explained that in Botswana the average game ranch is currently a healthy 9000ha that is more than ten times in South Africa. He advised that registration should be restricted to ranches exceeding 2000ha and intensive breeding should com under separate legislation.
Game ranching in Botswana began in the late 1980s. At first it was limited to a few large cattle farmers in Ghanzi and Tuli Block who had the initiative, land and funds to develop it. These early pioneers were influenced by the development of the industry in Namibia and South Africa. By 1999 there were still only 17 game ranches in Botswana but since 2000 game ranching has taken off in Botswana.
The advent of the Botswana Wildlife Producers Association (BWPA) in 2002 and a crucial government decision to allow full rights ownership over animals stimulated the fledging industry. It is reported that there are now over 100 game ranches in the country.
Choppies Holdings Limited, Botswana’s largest Fast Moving Consumer Goods (FMCG) retail group, is back to its glory days of profitability.
On Wednesday, Choppies signalled its shareholders in a circular published on the Botswana Stock Exchange website that a massive comeback is in the offing. The retail giant, which trades on both Botswana and Johannesburg Stock Exchange, notified its investors that it is currently finalising its financial results for the 12 months ended 30 June 2021 (FY2021).
As per the Listings Requirements of the Botswana Stock Exchange (BSE) and the Johannesburg Stock Exchange Limited (JSE), that requires companies to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on next will differ by more than 10% (in the case of the BSE) or more than 20% (in the case of the JSE) from the financial results reported for the previous corresponding period, Choppies notified the market about the expected financials.
In the circular, Choppies said it expects the consolidated Profit after Tax, including discontinued operations for the period FY2021, to be between 106% to 126% better than the Loss after Tax of BWP 370.6 million reported for the period FY2020, representing a Profit after Tax of between BWP 22.6 million and BWP 96.7 million.
The Profit before Tax for FY2021 is expected to be between 1% and 21% higher (BWP 105.7 million and BWP 126.7million) than the Profit before Tax of BWP 105.0 million reported for the period FY2020. The Choppies come back is against the backdrop of a devastating past three(3) financial years where the company endured some of the worst headwinds ever since its establishment over two decades ago.
Following reports of internal boardroom wars, the crisis exploded to fireworks. The retail giant was suspended on both Botswana and Johannesburg Stock Exchange for failing to publish its audited financials as per the regulatory requirement for all publicly listed companies. Following suspension from trading, Choppies’s value deteriorated to record low levels, triggering massive governance restructuring before reconfiguring its portfolio, divesting and exiting some markets, retreating to regroup in its spiritual home ground of Botswana.
In the process, the retailer stayed on news headlines for all the wrong reasons, boardroom infighting, shareholder tussles and disagreements between founders and back to back conflicts with its external auditors. At some point, Choppies founder, Chief Executive Officer and talisman, Ramachandran Ottapathu, was suspended and later reinstated in a dramatic turn of events. Furthermore, the fallout saw the longest-serving Chairperson, former President Dr Festus Mogae, resign as board chair.
The delayed 2018 year-end financial results, released a year and a half later in December 2019, delivered a shock to shareholders, with many pundits announcing Choppies’s funeral. Choppies registered a whooping BWP 445 million loss for the full year ended June 2018. Another shocking loss of BWP170 million for 2017 was initially reported as a BWP 74. 6 million profit when KPMG was still the auditor.
The Choppies loss-making crusade spilt over to 2019, registering in loss BWO 428 million before drowning again into a loss of BWP 370.6 million for the full financial year ended June 2020. In July this year, Choppies biggest individual shareholders Ramachandran Ottapathu and Farouk Ismail, revealed they would be levelling a lawsuit against former Choppies auditors Price Water Coopers (PWC).
The duo blames the auditors for alleged lapses, incompetence, and deliberate sabotage that led to the company’s regulatory non-compliance and subsequent suspension from the Botswana Stock Exchange in 2018 and a massive deterioration in value. In the Annual Report for the financial year ended June 2020, released in November that year, newly appointed Board Chair Uttun Corea announced that Choppies had appointed new auditors, Mazars, regarding FY19 and FY20.
The new board further announced a massive reconfiguration strategy to return the company to glory. The Board Investment Committee recommended disposal of loss-making operations in South Africa and the closure of operations in Mozambique, Kenya and Tanzania, which according to Mr Corea, helped return the Group to profitability.
“Our other markets also proved economically challenging with a struggling and volatile Zimbabwean economy, currency devaluation in Zambia, and a lack of economies of scale in Namibia. However, we believe a focused approach in these regions and the numerous opportunities for growth in Botswana present the Group with solid prospects.
This conditions, together with the favourable conditions following the introduction of funds by the founding shareholders, together with additional security, and given the renegotiation of our banking facilities which will see our monthly payments lower, put the Group on a firm going concern footing,” the board Chair said last year.
Cresta Marakanelo Limited (CML), Botswana’s most prominent hotels and hospitality group, has decided to exit the Zambian market, the company announced on Wednesday.
CML, a Botswana version of the larger Southern African Cresta Hotels Group, revealed in a circular to its shareholders on Wednesday that “it will not be renewing the lease agreement with Golfview Hotels Limited for the rental of Cresta Golfview Hotel in Lusaka, Zambia.” The Botswana Stock Exchange (BSE) listed hotels group explained it would be withdrawing from the Cresta Golfview Hotel operations on 30 September 2021.
CML explained in the circular that for continuity of operations, the landlord, Golfview Hotels Limited, will be taking over the management of the hotel and will endeavour to absorb the majority of the staff.
“The consideration to not renew the lease came after a review of the financial viability of continuing with the lease agreement. The decision to exit the lease is therefore in the best interests of CML shareholders,” Cresta Marakanelo Board explained on Wednesday.
For the year ended 31 December 2020, Cresta Golfview Hotel accounted for 5% of the CML Group’s revenue and 2% of the Group’s loss before tax. The company said it would continue to operate the 11 hotels in Botswana.
The Board of Directors of Cresta Marakanelo went on express gratitude to its dedicated staff at Cresta Golfview Hotel, “The men and women who personified our Cresta brand essence; Where One Smile Starts Another and lived our Cresta mantra of Hospitality with African Heart and Soul consistently over the years.” The Board further thanked its business partners in Zambia: the valued guests, suppliers, stakeholders, and the Zambian community at large during the time CML has operated in Lusaka.
“We look forward to welcoming you to our other properties under the CML portfolio,” the statement said. Early this year, Cresta Marakanelo attempted to expand its Botswana footprint, nearly taking in Phakalane Golf Estate & Hotels Property under its wing. In January 2021, Cresta Marakanelo announced that it had signed a 10-year lease agreement for the hotel and the golf course, located in the Gaborone high-end suburbs, with an option to renew for a further ten year period.
In addition, Cresta had planned to pay Phakalane P10.7 million as a once-off for moveable assets, including furniture, fittings and equipment, with the amount payable over 24 months. Two months later, CML directors told shareholders that the conditions necessary to finalise the deal had not been fulfilled, and as a result, the transaction could not materialise.
Cresta Marakanelo is the operating company for, until this Zambia exit, the 12 Cresta Hotels in Botswana and Zambia. The company was formed in 1987 with an initial portfolio of fewer than 290 rooms, and until this September end exit, Cresta Marakanelo has been managing over 1000 rooms in Botswana and Zambia.
Since its establishment, Cresta Marakanelo Limited (CML) has maintained its position as the largest hotel group in Botswana. The company was established in 1987 when Cresta Hospitality was awarded the Management contract for the Marakanelo Hotels in Botswana by the Botswana Development Corporation.
Cresta Marakanelo was listed on the Botswana Stock Exchange in 2010. Its largest shareholders are the Botswana Government, through the Botswana Development Company, at 30 percent and Cresta Holdings Botswana at around 29 percent, with other shareholders being Motor Vehicles Accident Fund Botswana, Botswana Insurance Company, amongst others.
Established in 1970, the Botswana Development Company is the investment arm of the Botswana Government. BDC’s main aim is to be the country’s principal agency for commercial and industrial development. The Government of Botswana owns 100 percent of the issued share capital of the Corporation. BDC has interests in industry, property development and management, agribusiness and services.
Cresta Holdings Botswana is ultimately owned by Masawara Plc, a Jersey Registered Company listed on the London Stock Exchange’s Alternative Investment Market, with an investment portfolio that extends from Botswana to Zambia, South Africa and Zimbabwe. The Group’s portfolio spans the Hospitality, Insurance, Investment Management and Agrochemical sectors.
Its hospitality arm, Cresta Hospitality Holdings, is one of Southern Africa’s largest hotel management groups, managing or operating hotels in Botswana, Zimbabwe and Zambia. Cresta Hospitality started hotel operations as far back as 1958. Cresta Holdings is a hotel management company registered in Botswana.
Absa Bank Botswana released their condensed consolidated interim financial statements for the period ended 30 June 2021. Profit before tax grew significantly by 125% against the previous year, a material recovery from the June 2020 position.
According to the company directors, the performance was driven mainly by the positive performance of the impairment line together with the positive momentum on cost lines. Pre-provision profit has also grown year on year by 9%.
Consequently, the bank’s Return on Equity (ROE) went up to 19%. Total revenue declined 1% year-on-year. Net interest income fell 8% due to margin compression driven by interest rate cuts in 2020. However, the sales and transactional banking franchise realised impressive recovery rates with volumes going up to almost pre-COVID-19 levels, and fee revenue grew 20% year on year.
Absa boasted that their operating costs remain well contained, on a reducing trend compared to the prior year. On a statutory basis, operating expenses totalled P460 million, representing a 7% decrease year-on-year. This was achieved by an overall reduction in spending as the bank continues to leverage on a leaner, rotational and digitally-led operating model.
Costs in the current year have benefited from the absence of the Voluntary Staff Separation exercise that happened in the first half of 2020, together with a significant reduction in separation expenses as the rebranding exercise has been completed. Cost-to- income ratio declined 4% and ended at 58% for the period under review. On a year-on-year basis, our credit losses decreased materially by 74%.
This significant drop was driven primarily by the better-than-expected performance of the macroeconomic variables, predominantly GDP, which carries a higher weighting in the bank risk models. With improved and stable portfolio performance, the loan loss rate improved to less than 1% for the period ended 30 June 2021.
Absa balance sheet continued on its growth trajectory with an overall growth of 14%. Customer loans and deposits remained key. components of the balance sheet and the key drivers of balance sheet growth. The balance sheet position remains solid at a total financial position of P21.5 billion. Customer loans grew by 9% year-on-year to P14.8 billion.
“We have seen increased momentum in our loan conversion rates, especially in RBB where growth was driven by scheme loans, mortgage loans and Enterprise Supply-chain Development (ESD) loans,” the bank said in a commentary that accompanied the financials.
Directors explained that growth is in line with their strategy to continue to lend a hand to the bank customers who need support during this period and support the initiatives around citizen economic empowerment and economic diversification. Customer deposits have registered good momentum growing 15% compared to last year, reaching P16 billion as of 30 June 2021.
“Although we have seen tightening liquidity in the market, our client penetration, acquisition and retention strategy has borne much fruit, especially in our CIB segment. We have noted a stable upward trend in our deposit book, a momentum which is expected to last into the rest of the months of 2021,” Directors observed.
Directors further noted that the solid balance sheet position and recovery in profitability had further strengthened the bank’s capital position, which stands at P2.9 billion and represents a capital adequacy ratio of 18% against a regulatory requirement of 12.5%. The liquid assets ratio stood at 14.6%, well above a regulatory limit of 10%.
Zooming deep into segmental performances, corporate and Investment Banking (CIB)closed off the first half of 2021 with a year-on-year decline of 3% on total income; this is on the back of the slow recovery in economic activity felt in crucial economic sectors which have previously contributed positively to revenue.
Business sentiment and confidence remain subdued even in 2021 as uncertainty continues due to the impact of COVID-19. However, the profitability of CIB is on the move, on an upward trajectory with 36% growth year-on-year. This performance was supported by the non-funded income lines’ resilience and the impairment lines’ performance.
For the Retail Banking segment the first half of the year, both loans and advances and deposits due to customers grew by 14% and 16% year-on-year, respectively. Overall revenue has remained flat year-on-year. Growth was realised from non-interest income. This is in line with the bank’s strategy to become the go-to transactional and digitally-led bank.
In the future, Absa directors noted the volatile, unpredictable environment that continues to prevail due to the COVID-19 pandemic, which comes with new waves of infections and variants, restricted movement and trade.
” However, we remain resolute in executing our refreshed strategy and focus on offering our employees and customers support in collaboration with the various stakeholders that we have partnered with.
As part of our strategy to provide customer-centric transactional banking solutions, we will continue to roll out enhancements to our existing digital platforms and develop new solutions that offer our customers convenience and safety.” For the period, Absa Bank Botswana Limited Board approved an interim dividend of 9.74 thebe per share, amounting to a total dividend of P83 million.