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Sefalana beats tough trading environment

Sefalana MD Chandra Chauhan

Botswana’s home grown retail and wholesale group Sefalana Holding Limited with its diversified portfolio that runs across Southern Africa has remained resilient against 2019/20 difficult trading environment.

Amid depressed economic conditions for the larger part of 2019 and low economic activity due to COVID-19 pandemic in 2020, the Botswana Stock Exchange (BSE) listed Fast Moving Consumer Goods Group has maintained growth, registering P5.8 billion in revenue, up from P5.3 billion registered in the prior year ended April 2019.

“Notwithstanding the difficult times, we have managed to close the year with a sterling performance. Last year we reported our best ever results and this year we have done it again, and are pleased to generate almost exactly the same profit despite the adverse impact of Covid-19,” said Sefalana Group Managing Director, Chandra Chauhan when delivering audited Group financial results this week.

According to Chauhan much of the focus during the year under review was on Fast Moving Consumer Good segments of the business across Sefalana’s operating markets. “That is where we had placed considerable efforts to revive and improve margins and relative contribution to Group results,” he said.

The Managing Director further added: “We had made considerable progress in this area in the first half of the year but then the business was negatively impacted by the COVID-19 pandemic, when our stores were restricted in terms of permitted customer numbers and when liquor sale were prohibited during lockdown.”

In terms of segmental performance, Botswana basket, where Sefalana operates over 50 stores in wholesale and retail as well as other businesses in manufacturing and property, brought to the table P135.6 million in profits during the year.

Sefalana’s Namibian business contributed 29 % and 21 % of revenue and profit before tax for the year respectively. Turnover amounted to P1.7 billion, a growth of 5 % on the prior year after the negative impact of currency convention. Profit before tax amounted to P53 million which was down from the prior year. In Lesotho turnover closed the year at P529 million, contributing 9% of total Group revenue.

In the overall Sefalana generated a profit before tax of P259 million for the year. “We are confident that our shareholders and potential investors will be pleased with our performance and will share our enthusiasm with the forward looking prospects of our business and brand.”

Furthermore Sefalana MD officially revealed that in April 2020 the Group entered into an agreement to purchase 40% of the share capital of an Australian business that operates in the Fast Moving Consumer Goods division.

“This Australian business, by the name of Seasons Group, consists of a chain of 7 supermarkets in the Brisbane area. This investment will be treated as an investment in an associate, in which Sefalana exerts significant influence, and therefore will be equity accounted,” he said.

Chauhan explained, “Sefalana entered into this agreement in order to pursue its Group strategy to diversify its income stream and foreign exchange exposure. Further expansion in Australia will be considered in due course as we identify other suitable sites to compliment this first phase investment.”

Business

Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020
Diamonds

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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