Botswana-based Choppies Enterprises reported resilient top-line for the six months ended 31 December 2025, with revenue increasing 8.6% to BWP5.1 billion (R6.3 billion).
However, the retailer’s bottom line came under significant pressure from a “cyclical demand contraction” and severe macroeconomic headwinds in its home market of Botswana.
Profitability under pressure
While retail sales grew by 8.9%, driven by 25 new store openings and volume growth, operating profit (Ebit) fell 20.0% to BWP152 million (R187 million).
Profit from continuing operations decreased 33.0% to BWP77 million (R95million).
Management noted that profitability was primarily eroded by the slump in the global diamond market, which reduced consumer liquidity in Botswana.
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This was compounded by the July 2025 devaluation of the pula, which added BWP64 million (R79 million) in costs that could not be passed on to consumers.
Read: PwC investigated over Choppies audit in Botswana
Additional pressures included the implementation of a living wage in Botswana, inflationary costs, and aggressive discounting by competitors.
Strategic expansion and cash flow
Despite the dip in earnings, Choppies continues to invest in scale, increasing its footprint to 302 stores across Botswana, Namibia and Zambia.
The group’s free cash flow surged by BWP65 million to BWP118 million (R146 million), supported by an inflow in working capital and the full repayment of BWP82 million (R101 million) in consortium debt in January 2026.
“Building scale now to capture operating leverage during recovery” remains a key focus for the group.
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In line with lower profitability, the board declared a reduced interim dividend of 1.0 thebe per share, compared to 1.6 thebe in the prior period.
Regional outlook
Looking ahead, Choppies expects continued uncertainty due to regional currency volatility and global conflict.
However, management remains confident that the demand contraction is cyclical rather than structural, citing rapid urbanisation and underpenetrated formal retail markets as long-term drivers for growth.
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