The good times continue to roll, and the cash continues to flow for Sefalana, the wholesale giant raking in profits of P205 million before tax for the six-month period ending on 29 October 2023.
The figure represents a 5 percent increase compared to the same 26-week stage in the previous year.
Presenting their financial report on Friday, Sefalana Group Finance Director, Mohamed Osman revealed the company’s assets grew in value by P100 million over the course of the half-year period. At the start of May, the figure stood at P2.3 billion; by the end of October, it had grown to P2.4 billion.
“The market capitalization [the total value of all a company’s shares] of the Group on 29 October 2023 amounted to P2.9 billion, placing Sefalana as the largest in the Retail and Wholesale sector on the Botswana Stock Exchange. Our share price at P11.28 has seen increase during the period and 18 percent since October 2022. Our consistent dividend policy of paying out approximately 50 percent of earnings in the form of dividends has provided a regular and sustained income stream for our shareholders for many years,” Osman said.
He added that during the period under review, the Group continued to invest significantly in inventory to ensure supply constraints were minimized. This kept stock-outs [when customer orders for a product exceed the amount of inventory available] to a minimum and provided the Group customer base with a consistent product offering.
Osman said that to mitigate the impact of price increases from South African suppliers over the last 18 months, the Group accelerated procurement in a number of commodities.
“In doing so, we have been able to delay price increases to our end customer wherever possible. Our cash position at the end of October 2023 is good and sufficient to meet all our current liabilities with a sensible and prudent retention,” he continued.
Osman revealed load shedding in South Africa has had a huge impact on neighboring countries, causing manufacturing volumes to drop and pushing the cost of raw materials up.
“Much of these raw materials are sourced by our suppliers from territories across the world where the economic environment has made doing business more costly,” he explained.
Responding to questions from the floor, on the impact of the Russia-Ukraine war, the Middle East crisis, and the setting alight of trucks in neighboring SA, Osman said the impact of the war is yet to be felt. He said they have managed to stockpile enough sorghum and maize to meet the local demand for several months, adding the burning of foreign trucks on South African roads has not impacted on their business since they do not directly procure from South African suppliers.
The Group further reported revenue at P4.7 billion, a 4 percent increase from the previous reporting period.
SEFALANA IN NUMBERS
Gross Profit – P336 million up by 7 percent on prior period.
Earnings before Interest, Tax, and Amortization – P211 million up by 7 percent on prior period.
Profit Before Tax P205 million – up 5 percent on prior period, 17-18 percent up year on year.
Interim Dividend of 12 Thebe per share to be paid to shareholders.
Foods Botswana contributed 4 percent and 14 percent to Group turnover and PBT for the period respectively.
P300 million to be invested in a plant for production of bottled water – Clear Water
