Choppies ‘pleased with Kamoso performance’

Choppies, the Botswana Stock Exchange-listed home-grown retailer, has highlighted value addition brought to the group by last year’s acquisition of Kamoso Africa.

The retail giant said in its half year results for the period ending December 31 that the acquired entity, which is a distribution outfit, already reported a profit.

Choppies CEO, Ramachandran Ottopathu said in a statement accompanying the interim results that as part of the deal, they took cession of Kamoso shareholders’ P22 million loans.

“Overall, we are pleased with the performance of Kamoso in the short time since acquisition and we are seeing vital signs of a turnaround,” he said.

The retailer, which operates more than 200 stores nationwide, in 2023 added Kamoso to its portfolio by acquiring 76% of the group while BDC retained its 24% stake. Kamoso’s well-known divisions include Liquorama, Builders Mart, Mediland, Lemepe, Mont Catering and Refrigeration and others.

“We are confident that the acquisition will be value accretive for the Group going forward,” Ottopathu added.

During the reporting period, sales increased by 7.1 percent and Kamoso moved from a loss after tax of P4 million last year to a profit after tax of P11.8 million this year. These numbers exclude the loss of P10 million relating to the discontinued business of Keriotic.

Meanwhile, despite the challenging economic environment, Choppies’ retail sales went up 21.3% to P4.2 billion from P3.5 billion reported in unaudited December 2023 results, while gross profit rose by 21.3% to P893 million from the P736 million.

“This was driven by 10 new Choppies stores and the acquisition of 100 liquor and hardware stores from Kamoso as well as other Kamoso divisions. “Choppies segments saw volume growth of eight percent with only Zimbabwe experiencing negative volume growth. Price growth increased 0.6 percent mainly due to weaker translation exchange rates,” the CEO said.During the period, the gross profit margin remained flat at 21.0% from last period, despite the dilutionary impact of the Kamoso acquisition. Botswana, Namibia and Zimbabwe improved gross profit margins, while Zambia margins declined due to competitor discounting.

Overall, the Choppies segments improved gross profit margins, offsetting the dilutionary impact of the Kamoso gross profit margin. Kamoso’s gross profit margin of 17% is driven by liquor and the medical distribution business. However, the economic situation facing Choppies Zimbabwe segment negatively impacted results.

Kamoso’s well-known divisions include Liquorama, Builders Mart, Mediland, Lemepe, Mont Catering and Refrigeration and others