Choppies Enterprises Limited reported a modest increase in revenue for the six months ended December 31, 2025, but profitability came under pressure as costs rose sharply in a difficult consumer environment marked by weak demand and macroeconomic strain.
The retailer posted revenue of P5.1 billion, up from P4.7 billion in the prior period, driven by new store openings, inflationary price increases and volume growth. Retail sales rose 8.9% to P5.09 billion, supported by 25 new stores and like-for-like sales growth of 2.9%.
Despite the topline growth, profit after tax declined to P77 million from P85 million, while operating profit fell 20% to P152 million, reflecting rising operating costs that outpaced gross profit growth. The group said total expenses increased by over 9%, driven by inflation, expansion-related costs and continued investment in new stores that have yet to reach full maturity.
Gross profit rose to P1.0 billion but margins narrowed to 19.8% from 20.6%, with pressure recorded across most segments except the higher-margin Liquorama business. EBITDA declined 7.8%, while adjusted EBITDA fell 13.5%, highlighting the strain on underlying profitability.
The group attributed the weaker performance to a combination of macroeconomic factors, including reduced consumer liquidity linked to the downturn in Botswana’s diamond sector, government austerity measures, and the devaluation of the pula in July 2025, which increased operating costs by about P64 million that could not be fully passed on to customers.
Regionally, performance was mixed. Botswana, the group’s largest market, saw subdued growth with like-for-like sales declining amid reduced household spending, while Namibia recorded strong sales growth of over 20% but experienced margin pressure due to government subsidies on key food items. Zambia delivered strong revenue growth in pula terms but profitability remained constrained by currency movements and persistent cost pressures.
On the balance sheet, total assets increased to P3.09 billion, while equity improved to P301 million from P199 million a year earlier. Cash and cash equivalents declined to P120 million from P151 million, reflecting continued investment and financing activities.
Cash generation remained a bright spot, with net cash from operating activities rising to P324 million, supported by improved working capital management. Free cash flow surged by more than 120%, even as the group invested P127 million in new stores and logistics infrastructure.
Looking ahead, the retailer expects continued uncertainty across its markets, citing global economic volatility, inflationary pressures, and constrained consumer spending. Management said its focus will remain on cost discipline, improving operational efficiencies, and completing the turnaround of underperforming segments such as Liquorama and Builders Mart.
The board declared an interim dividend of 1.0 thebe per share, down from 1.6 thebe in the prior period, reflecting the more cautious earnings outlook.