CA Sales Holdings Limited (CAS.bw) HY2019 Interim Report

We have extracted a Chairman’s Statement from 2019 half year interim report for CA Sales Holdings Limited (CAS.bw), listed on the Botswana Stock Exchange:

Nature of business

CA Sales specialises in the fast-moving consumer goods industry and delivers route-to-market services to manufacturers or owners of some of the world’s leading and most prominent brands. The service offering includes warehousing, distribution, selling, merchandising, shopper marketing, training and debtor’s administration. The group has a varied geographical presence across Southern Africa operating in Botswana, Lesotho, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe.

Financial highlights

CA Sales is pleased to announce its half year results for the period ending 30 June 2019. Revenue increased by 20.6% to over R2.9 billion from R2.4 billion in the prior interim period, through mostly organic growth. In a challenging operating environment, management continues to focus on capability building, delivering operational excellence, efficient stock management, dynamic service levels and continual cost efficiencies. This resulted in a corresponding increase in gross profit of 18.0% to R451.2 million (H1 2018: R382.4 million) and a robust 60.4% increase in headline earnings to R73.3 million (H1 2018: R45.7 million). Headline earnings per share was up 59.3% to 16.33 cents per share (H1 2018: 10.25 cents).

Despite head winds in some of the territories in which the businesses operate, the group produced pleasing results. The growth on prior year was underpinned by a good overall performance from all the major operations for the first six months of the year. Total assets increased by 14.6% to R2.6 billion due to the increase in right-of-use assets in accordance with IFRS 16, as well as a significant increase in working capital mainly due to the increased revenue.

Future strategy

The group will continue its expansion by growing its principal and customer networks and making value-adding acquisitions, broadening its footprint further across the African continent. It is expected that the challenging economic environment and difficult trading conditions will continue for the time being. The group is well positioned with a strong balance sheet and a diverse geographical presence across Southern Africa. The group’s diversified portfolio should enable it to deliver sustainable results for the remainder of the year.