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Unaudited group financial results for the six months ended 31 December 2023
CHOPPIES ENTERPRISES LIMITED
Registration number BW00001142508
ISIN:BW0000001072
BSE SHARE CODE: CHOP-EQO
JSE SHARE CODE: CHP
Tax Reference Number: C08710401018
("Choppies" or "Company" or "Group")
UNAUDITED GROUP FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023
The board of directors of Choppies ("Board") announces the results of the Group for the six months ended 31
December 2023 ("HY2023"). These results have not been audited nor reviewed by the Company's auditors.
6 months 6 months
Continuing operations (Unaudited) ended 31 Dec ended 31 Dec Change
2023 2022
Pula Millions Pula Millions
Revenue 4,288 3,535 21%
Retail sales 4,258 3,511 21%
Gross Profit 893 736 21%
Operating Profit (EBIT) 181 141 28%
Operating margin 4.3% 4.0% 0.3 bps
Profit for the period 100 71 41%
Basic earnings per share* 5.4 Thebe 5.3 Thebe 1%
Headline earnings per share* 5.3 Thebe 5.2 Thebe 2%
Net cash flows generated from 338 290 48
operating activities
Cash and cash equivalents at end of the 116 36 80
period
* The previous year's basic and diluted earnings per share have been restated to account for the adjusted
weighted average number of shares as a result of the rights offer completed during June 2023.
Financial highlights
The Group results for the six-month period were positively impacted by the Kamoso acquisition while the economic
situation facing the Choppies Zimbabwe segment negatively impacted results. The growths in the key performance
indicators are set out below, excluding both Kamoso and Zimbabwe.
As reported As reported - excluding As reported - excluding
Kamoso Zimbabwe
% % %
BWP millions Dec-23 Dec-22 Growth Dec-23 Dec-22 Growth Dec-23 Dec-22 Growth
Sales 4,258 3,511 21% 3,709 3,511 6% 3,982 3,083 29%
EBIT 181 141 28% 162 141 15% 175 114 54%
Profit before tax 123 86 43% 111 86 29% 122 62 97%
Profit after tax - continuing
operations 100 71 41% 91 71 28% 100 46 117%
Profit after tax - discontinued
operations (10) - - - (10) -
Profit after tax - total
operations 90 71 27% 91 71 28% 89 46 93%
EBITDA 322 267 21% 277 267 4% 307 236 30%
Adjusted EBITDA 316 254 24% 271 254 7% 326 237 38%
Notwithstanding the weak performance from the Zimbabwe segment, as well as excluding the Kamoso acquisition,
the Group's performance was strong. The commentary below further explains the performance of the Group and its
segments.
The Kamoso general merchandise business was sold and discontinued during the reporting period.
The Group's retail sales increased by 21.3% to BWP 4 258 million (2022: BWP 3 511 million), driven by 10 new Choppies
stores and the acquisition of 100 liquor and hardware stores from Kamoso and the other Kamoso divisions. Choppies
segments saw volume growth of 8.0% with only Zimbabwe experiencing negative volume growth. Price growth of 0.6%
mainly due to weaker translation exchange rates. Sales volume for like-for-like stores increased by 1.6%.
The gross profit margin remained flat at 21.0% from last year, despite the dilutionary impact of the Kamoso
acquisition. Botswana, Namibia, and Zimbabwe improved gross profit margins while Zambia gross profit margins
declined due to competitor discounting. Overall, the Choppies segments improved gross profit margins offsetting the
dilutionary impact of the Kamoso gross profit margins. Kamoso's gross profit margin of 17% is driven by liquor and
the medical distribution business.
In Pula terms, gross profit increased by 21.3% to BWP 893 million (2022: BWP 736 million) despite the challenging
economic environment.
Expenses increased by 19.9% due to new stores and as well as high inflation. Excluding foreign exchange losses on
lease liabilities of BWP23 million (2022: BWP9 million) and foreign exchange gains on Zimbabwean legacy debt
receipts of BWP28 million (2022: BWP9 million), expenses increased 18.8%.
Operating profit (EBIT) increased by 28.4% from BWP 141 million to BWP 181 million while Adjusted EBIT, which
excludes foreign exchange gains and losses on lease liabilities, movements in credit loss allowances and Zimbabwean
legacy debt receipts increased by 37.9%.
Net finance costs were higher than last period due to the inclusion of finance costs relating to Kamoso. Choppies
segments net finance costs reduced by BWP 4 million due to lower borrowings which was offset by higher interest on
leases due to new stores.
The effective tax rate is lower than the standard rate mainly due to the legacy debt receipts from Zimbabwe that are
exempt from income tax and the raising of deferred tax on carried forward tax losses. We raised a deferred tax asset
of BWP 8 million for Zambia as we are now confident that this country will generate taxable profits in the foreseeable
future.
The Board has declared an interim dividend of 1.6 thebe (2022: Nil thebe) per ordinary share, payable to
shareholders on or before Tuesday, 16 April 2024. This is in accordance with the dividend policy adopted at the time
of the BSE listing that a dividend cover of three will be maintained. A separate announcement will be made providing
shareholders with further information relating to the interim dividend.
Short-form announcement
This short-form announcement is the responsibility of the Board. It is only a summary of the information contained in
the Group's full HY2023 results announcement, which is available on the BSE's X-News and on the JSE Limited ("JSE")
SENS at: https://senspdf.jse.co.za/documents/2024/JSE/ISSE/CHP/HY2023.pdf
and on the Group's website: https://choppiesgroup.com/investor-relations/.
The Company has a primary listing on the BSE and a secondary listing on the JSE.
29 February 2024
BSE Sponsoring Broker JSE Sponsor
Stockbrokers Botswana Limited PSG Capital
Date: 29-02-2024 09:00:00
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