Sefalana Holding Company Limited 2018 Annual Report

We have extracted below the Chairman’s Statement from the 2018 annual report of Sefalana Holding Company (SEFALA.bw), listed on the Botswana Stock Exchange:

It is through our continued efforts in being innovative, that we have managed to grow our business into a sustainable enterprise.

The Group has a robust Board of Directors possessing relevant expertise ranging from sector experience to company strategy and from finance to compliance. The collective leadership and distinguished experiences provided by our Board offers focused insights, a mature structure and unwavering commitment to ethics.

We completed our annual Board evaluation during the year and are confident that our Board is appropriately constituted to continue to add value to our business in accordance with the principles of good corporate governance.

Sefalana’s financial results this year prove the Group’s ability to weather both economic and trading storms alike as we successfully navigated through a challenging year.

We achieved this through our diversification strategy, strong relationships with our supplier and distribution networks, increased buying power and enhanced efficiencies gained in many aspects of our business.

The Group’s profit before tax increased year on year by 34%, indicating a tremendous achievement. As a result, we have been able to give back a little more to our Shareholders who have received a 10% higher dividend return on their investment this year. We pledge to maintain sustainable value creation for our Shareholders and have over the last 5 years distributed 47% of earnings in the form of dividends.

As the local Botswana economy continues to recuperate from lower levels of spending and higher levels of unemployment, we are encouraged by the strong performance of our Namibia and Lesotho businesses which have both provided an augmented contribution towards overall Group results. In addition, we are pleased to report that our South African investment has generated a sizable first year return. This has contributed significantly to this year’s results. Further analysis of our financial performance is contained in the reports by the Group Managing Director and Group Finance Director.

We maintain our promise to deliver our best at all times to all our stakeholders. Our priority is to ensure sustainability, and delivery of the highest levels of corporate governance and reporting. In the current year, we enhanced our online shopping website and have extended this service to our customers in Francistown and Maun. In November, we launched our free mobile shopping App that now gives access to our online shopping site to all smart phone users. We are pioneers in the local market in this respect and are proud to lead the market in a number of initiatives.

We have grown the total number of stores to 73 and invested in a South African consortium which owns a further 14 stores. We are pleased with these developments and will be working on additional store openings in the coming year as we focus on further strengthening our brand as a modern, profitable business rooted in fulfilling the needs of our customers.

The Group has a robust Board of Directors possessing relevant expertise ranging from sector experience to company strategy and from finance to compliance. The collective leadership and distinguished experiences provided by our Board offers focused insights, a mature structure and unwavering commitment to ethics. All our Board members actively participate in leading the Group and form an essential foundation to our Management team.

We underwent some changes to our Board composition this year. Mr. Hans Kampmann resigned as the Managing Director of Sefalana Cash and Carry Limited on 28 February 2018 after serving Sefalana for almost 20 years. Hans was admitted to the Board in 2012 and contributed considerably to the growth of this business. We bid Hans farewell and wish him success in all his future endeavours.

We welcomed a new Executive Director to the Board on 1 June 2018. Mr. Bryan Davis, Managing Director of our Namibia and Lesotho businesses. Bryan brings with him over 40 years of experience in the FMCG sector having worked in wholesale and retail in Botswana, Namibia, Lesotho, South Africa and India. We are confident that Bryan will bring additional insights to the Board as we continue our expansion in Namibia and Lesotho.

We completed our annual Board evaluation during the year and are confident that our Board is appropriately constituted to continue to add value to our business in accordance with the principles of good corporate governance. Our commitment to Board independence and corporate governance is illustrated through 5 of our 8 Directors being independent.

I would like to thank all our dedicated employees, at a regional and national level for their hard work and commitment to our Group. I also acknowledge the diligence and perseverance of my fellow Board members and the executive management team. A sincere thank you for striving towards and obtaining an improved financial performance and providing an extensive range of offerings for our customers. Lastly, I thank our customers, investors and stakeholders for their continued support and dedication to our Group.

I request all shareholders to attend the upcoming Group AGM, that will be held at the Sefalana Head Office, Plot 10038, Corner of Nelson Mandela Drive and Kubu Road on Friday, 26 October 2018.

Dr. PHK Kedikilwe, PH, NYB
Chairman