07 May 2015

Botswana’s leading supermarket chain, Choppies, has announced its intention to list in the JSE, Africa’s largest stock exchange by market capitalisation.

The company is already listed in the Botswana Stock Exchange (BSE) and this would be an inward secondary listing.

In a press release, the retailer with a market share of 36 per cent in Botswana states that the proposed listing would entail an issue of new shares and an offer for sale made by existing shareholders at a price to be determined by a bookbuild process.

The proceeds of the primary capital listing will be used to settle part of the existing borrowings and to fund the company’s expansion into existing and new markets.
According to the company, the offer will not be open to the public.

Choppies opened its first store in Lobatse in 1986, and today it has 125 retail outlets in Southern Africa, comprising 72 stores in Botswana, 35 in South Africa and 18 in Zimbabwe.
The company opened its first South African store in Zeerust in 2008. It has since replicated its successful model in many towns across Mpumalanga, Limpopo, North West and Free State provinces.

In 2013 it entered Zimbabwean market and Choppies says it has exceeded all expectations and their objective is to open up to 50 stores. New markets are also planned as Choppies looks into expanding to Zambia, Tanzania, Kenya and Namibia.

Choppies Chief Executive Officer Mr Ramachandran Ottapathu says the JSE listing would enable them to expand their footprint into Africa.

“We are very proud of the company we have 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,” he says in the press release.

Choppies business model has delivered strong growth and over the three years to June 30, 2014, it recorded a compound annual growth rate in revenue of P5, 012 million. Mr Ottapathu says the company already operates stores in markets with significant growth potential and has a wealth of experience in servicing the needs of their customers.

“We know and understand our market with our focus on customer experience and value for money,” he said.

He said they will continue to expand their footprint to 200 stores in six countries by the end of 2016. Choppies listed on the BSE in January 2012 at a price of P1.15 per share and as at 4 May 2015, the share price had increased to P4.05 with a market capitalization of over P4.7 billion.

Since its listing, it has maintained a dividend payout ratio above 30 per cent which is expected to increase to 50 per cent over time. According to information on the JSE website, it is ranked number 19 in the world by market capitalization and the largest in the African continent. Ends