R275m Investment in South Africa returns 15% for shareholders
Expands Cars in Sefalana Showroom
In-House Printing and fitting businesses to save 20% of spending each
Sefalana is working smarter, finding new ways to make money, and making strategic moves to grow. This means steady profits, better efficiency, and strong future growth—giving shareholders and investors a solid and promising opportunity.
1. Investment in South Africa: Steady Returns, Big Potential
Investment: R275 million in a Buy Group that operates a retail chain.
Return: 15% every year (basically like earning interest on your money).
Option for Ownership: In 2025, the group can turn this investment into a 30% stake in the company, according to its MD Chandra Chauhan.
What it means:
Reliable Earnings: Estimates by the company show that the group will earn R40 million as the first installment before the end of October 2025.
Opportunity for Growth: The group is relying on the strength of a local retailer with experience in running businesses in South Africa. Chauhan said the Buying Group is set to expand across South Africa, opening up more revenue growth.
2. Automotive Business: Addition BAIC Cars
New Dealership: Chauhan revealed that Sefalana now sells cars from a Chinese brand called BAIC.
Models Sold: The B40 and Beijing X55+, the latter priced around P380,000, according to the MD.
Sales: In just a few months, they’ve sold 20 cars.
What It Means:
Profitable Potential: Group MD Chauhan said the brand is increasingly appealing to the market. The rise of Chinese auto brands is disrupting markets globally, even challenging established names like Volkswagen in Europe. The range of brands the group sells now is four, including Tata, Honda and Man.
3. Cutting Costs with Level55 business (FMCG Supply Business)
Chauhan said this business division will supply fittings for its Fast Moving Consumer Goods (FMCG) business, which is the core business.
Chauhan estimates that this will help Sefalana save 20% on store fitting costs although he didn’t share how much they spent annually.
The business is expected to generate profits of P6 million in its first year, according to Chauhan.
4. In-House Printing Investment:
Sefalana is bringing printing in-house.
Chauhan said P45 million has been invested in an existing property.
He estimates that the business Unit will help save 20% of its usual printing costs (The group spent P35 million to P40 million in printing costs, according to the MD).
State of Play: Sefalana processes over P1 billion in transactions each year through mobile money, according to the MD.
Expansion Plans: Sefalana is considering expanding into the mobile money sector, starting in Namibia. This mobile money initiative could open up new revenue streams. While the exact costs aren’t fully calculated, mobile money services could eventually contribute immensely to overall revenue if successful.
Projected Timeline: Chauhan said this could be a 5-year project, requiring substantial investment, although the exact costs are yet to be fully calculated.
The group’s half-year revenue for the period ended 27 October 2024 reached P5.4 billion, marking a 14% increase over the previous year. Chauhan said Sefalana is on track to break the P10 billion revenue milestone, helped by strong Christmas trading and an optimistic outlook for the remainder of the year.
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