Sefalana Holding Company (Botswana) releases its 2022 Integrated Annual Report

Sefalana Holding Company Limited (SEFALA.bw) 2022 Annual Report

Chair’s report

I am delighted that the Group has been so resilient and resourceful during these uncertain times, and as a result we report to our Shareholders a record profit for the year. A detailed review of each business’s performance is included in the Group Managing and Group Finance Directors’ reports.

Covid-19 brought with it a number of unprecedented challenges and our teams across the various regions addressed these competently and put in place measures that helped mitigate these issues.

Our strategic focus in our core businesses, that of Fast-Moving Consumer Goods (FMCG), aligned our leadership team in pushing for growth where it mattered most. Our strong relationships with our suppliers helped ensure that we were able to meet our stakeholders needs by providing the right products at the right price and that stock shortages were minimised. We were also able to secure large procurement deals in advance of price increases and this allowed us to somewhat delay the inflationary impact for our customers.

The Botswana FMCG business has, in particular, experienced significant improvement this year following concerted efforts at margin management and service offerings. We look forward to further growth from this segment in the ensuing year.

Through collaboration between our teams, key learnings were shared and optimised between our various business units. Our Namibian business grows from strength to strength, and this is largely due to our clear understanding of the market and its needs.

We remain leaders in our sector in Botswana, Namibia, and Lesotho and this makes us proud of what we have achieved over the last 48 years.

Our manufacturing businesses which have historically been dependant on Government tender activity have evolved to becoming less reliant on a single customer, and our focus on growing branded products and our house brand range has helped us diversify our offering.

From the Covid – 19 pandemic perspective, we have seen a positive recovery in trading performance across the Group and are pleased to note that the worst seems to be behind us. We continue to observe all the necessary pandemic protocols and are pleased to report that it is “businesses as usual” in all our operations. We look ahead with positivity as we embark on further growing our business.

Innovation and diversification into new product offerings and into new territories has enabled our growth over recent years. Our preference share investment was redeemed in August 2022 after 5 years of very positive returns. This helped fund our expansion into Australia where we now have 9 stores and soon will acquire an additional 3 stores. This investment in Australia is still in its early stages, and we aim to continue to re-invest into the business for the next 5 years. We are confident that this will become an even more important part of the Group operations as time goes by and the hard currency exposure will serve the Group well.

Sefalana will continue to look for further growth opportunities and will ensure we pursue our strategic objectives. We are very cognisant of the Government’s focus areas for the development of the country, and where possible we look to identify opportunities which are aligned to those focus areas. We are confident that we have the right strategy in place to do this. During the year, some exciting new opportunities were identified, and large projects are now being pursued. We look forward to further announcements in this regard as we progress these endeavours.

We have seen worldwide inflation set in following the conflict between Russia and Ukraine. Unfortunately, we are not shielded from the knock-on effects of this conflict, as many key commodities consumed by our market originate from that area. We acknowledge and appreciate the additional pressure this will place on our people and are pleased to report that we have been able to increase the salary base by more than inflation for the large majority of our staff complement. We hope that this will assist them during these difficult times.

As I conclude, I would like to thank my fellow directors, some of whom we only recently welcomed to our Board, for the invaluable insight and guidance they provide. I would also like to thank the senior management team, who diligently and purposefully drive the business forward, and our valued customers who continue to show us their support.

To our shareholders, we are very happy to have declared not only a final dividend of 30 thebe per share, but also a once-off special dividend of 10 thebe per share to say thank you for having confidence in us and allowing us to make this Group the success it is today.

Our Annual General Meeting will take place virtually on Friday, 28 October 2022. We look forward to engaging with you at that forum.

J M Marinelli
Chair

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