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Oliver Kazunga Senior Business Reporter
REGIONAL retail group, Choppies Limited plans to expand its operations into Zambia and Tanzania by mid-year. The supermarket chain, which presently operates seven distribution centres and 125 retail outlets in Botswana, South Africa and Zimbabwe, also intends to spread its tentacles to Kenya and Namibia.
“Future expansion plans are to grow from the current 125 store footprint in existing markets and enter new markets in Zambia, Tanzania, Kenya and Namibia. The company expects to open its first stores in Zambia and Tanzania by mid-2015,” it said in a statement yesterday.
The group, which is listed on the Botswana Stock Exchange, also announced its intention to list on the main board of the securities exchange operated by the Johannesburg Stock Exchange (JSE).
“Choppies Enterprises Limited today announced its intention to list on the main board of the securities exchange operated by the JSE, subject to requisite approvals by JSE. The proposed JSE listing would be an inward secondary listing,” it said.
The proposed listing will entail an issue of new shares and an offer for sale made by certain existing shareholders at a price to be determined by a book build process (the offer).
It hoped that the offer price would be subject to terms approved by the shareholders of the company at the extra ordinary general meeting held on April 23, 2015.
The group’s chief executive officer Ramachandran Ottapathu was quoted as saying: “We’re very proud of the company we’ve built from such humble beginnings into the largest and most profitable retailer in Africa, outside of South Africa. The proposed listing on the JSE will give us a platform to continue our journey of growth and expansion.
“It’ll also enhance our public profile in South Africa, where we continue to expand our footprint.”
Choppies, which opened its first store in 1986 in Lobatse, Botswana, targets primarily lower to middle-income consumers.
Its supermarket retail offering mainly consists of fast moving consumer goods products that include international food brands and Choppies’ own private label products. The retail group also has a strong focus on service offerings (fresh fruit and vegetables, butchery, bakery and take-away).
Over the past three years to June 30, 2014, the group recorded a 27 percent compound annual growth rate (CAGR) in revenue to BWP5,012 million and 19 percent CAGR in Earnings Before Interest Depreciation Tax and Amortisation to BWP352 million.
“Choppies already operates stores in markets with significant further growth potential and we’ve a wealth of experience in servicing the needs of our customers. We know and understand our market with our focus on customer experience and value for money. We plan to expand into new markets with roll-outs in semi-urban and medium sized towns. We’re uniquely positioned to grow our market share in Southern Africa as shoppers progressively choose branded convenience over expensive and poor range alternatives. We’re well positioned to expand footprint to 200 stores in six countries by the end of calendar year 2016,” said Ottapathu.
Choppies, which at present operates 72 stores in Botswana, 35 in South Africa and 18 in Zimbabwe, was listed on the BSE in January 2012 at a price of BWP1,15 per share.
As at May 4, 2015, the firm’s share price has increased to BWP4,05 with a market capitalisation of over BWP4,7 billion.
Since the listing, the company has constantly maintained a dividend pay-out ratio above 30 percent which was expected to increase to 50 percent over time.
The group employs in excess of 11,000 employees across all its operations.
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