Choppies warns of profit drop amid slowing consumer spend
The retailer expects lower earnings despite steady revenue, while cash flow rises significantly.
BOTSWANA – Choppies Enterprises Limited has projected a decline in profit after tax for the six months ending 31 December 2025, with total operations expected to generate between US$5.4 million and US$6.1 million, down from US$6.3 million a year earlier.
Profit from continuing operations is expected to fall by 28% to 38%, to US$5.3 million to US$6.1 million, compared with US$8.5 million in the same period last year.
The supermarket group cited regional economic pressures as key drivers of the decline, with lower consumer spending in Botswana linked to a slowdown in the diamond sector, currency devaluation, government austerity, and rising inflation.
Retail conditions in Namibia also weighed on margins, as government-subsidised commodities affected prices, while in Zambia, an appreciating kwacha contributed to deflation on essential food lines, reducing revenue.
Newly opened stores are not yet achieving full sales potential, and competitive promotional activity in saturated markets further limits profitability across the group’s operations.
Despite the falling profit, Choppies reported continued revenue growth, indicating that demand for food retail products remains stable in its regional markets.
Free cash flow is expected to increase between 118% and 128%, reaching US$8.6 million to US$9.0 million, supporting liquidity even as profits decline.
Net cash from operating activities is projected to rise to US$23.0 million to US$25.2 million, reflecting the company’s ability to generate cash despite challenging trading conditions.
The firm has already repaid US$6.1 million in consortium debt in January 2026 using a combination of US$2.6 million from internal cash reserves and US$3.5 million in short-term borrowing.
Choppies also announced the addition of 626 employees across its operations and implemented living wage increases in Botswana during the period.
The company confirmed it will declare a dividend, although it will be lower than last year’s, in line with its 25% payout ratio policy.
The trading update follows a sharp decline in the company’s share price on the Johannesburg Stock Exchange, which fell from 795c (US$5.0) in early January 2026 to 190c (US$1.2) by 13 March 2026, driven in part by heavy selling from a major investor.
Choppies’ performance reflects both the challenges facing retailers in Botswana and the wider Southern African region and signals caution for markets historically seen as stable.
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