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Choppies CEO Ramachandran Ottapathu i Picture: CALVIN ANDERSON
Choppies CEO Ramachandran Ottapathu i Picture: CALVIN ANDERSON

Small cap Choppies almost doubled its headline earnings per share in the six months to end-December, despite a huge debt burden. 

The retailer, which has stores in Zambia, Botswana, Zimbabwe and Namibia, says it is the biggest retailer in Southern Africa outside SA. It has a primary listing on the Botswana stock exchange and a secondary listing on the JSE, but no longer owns stores in SA. 

The group’s revenue increased by 18.9% to 3.2-billion pula (R4.2bn) after it opened six new stores. Like-for-like sales growth was 13.9% and gross profit increased 15% to 686-million pula. Headline earnings per share rose to 8.1 thebe from 4.2 thebe.

However, it still has more debt than assets with 2.3-billion pula in debt and 1.9-billion pula in assets. 

It did not declare a dividend, citing economic uncertainty and efforts to rebuild the company.

Botswana store sales were almost flat in a challenging economic environment. Total operating costs rose by 9.7%, mainly driven by a 15% increase in administrative expenses.

The company has been mired in scandal and was suspended from the Botswana exchange and the JSE in October 2018 after missing a deadline to release financial results.  

Its auditor at the time, PwC, delayed releasing the results as it began “reassessing a number of past accounting practices and policies”.

It had concerns about how inventory levels were recorded,  accounting, and if there was money laundering from the Zimbabwean stores. ​

After the publication of 2018 and 2019 results, the discount retail chain was reinstated on the JSE in November 2020 after returning to the Botswana exchange a few months earlier.

The group has been involved in ongoing legal battles in Botswana with PwC over the delayed 2018 audit report. 

In September 2019, PwC declined to audit the firm further, citing reputational risk.

Previous auditors, KPMG, did not sign off results of some subsidiaries in 2016 and 2017.

Each week, 1.8-million customers visit 159 Choppies stores in four countries.

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