HomeChoice keen to expand into Africa
Home based retailer HomeChoice’s recent listing on the Johannesburg Stock Exchange is testament to the retailer’s ambitions to grow, in-turn, looking towards Africa. HomeChoice this week became the 18th company to list on the Johannesburg based bourse. Commenting on the listing, Gregor Lartigue, Chief Executive Officer of Homechoce International said, “The listing will provide access to capital markets for potential funding for future expansion and unlocking value for existing shareholders. We believe the listing will also improve incentives for directors, managers and employees by making their shares more trade-able, while also assisting the group in attracting and retaining talented scarce skills.”
The Cape Town based retailer views expansion into Africa as a sustainable growth opportunity for both HomeChoice and FinChoice business operations. Customers in the neighbouring countries of Botswana, Lesotho and Swaziland currently account for 9.5% of retail sales according to the latest annual report released. Added Lartigue, “Expansion into Africa and other territories will be accelerated through listing, for example, certain African jurisdictions will require local equity participation unless the group is listed.” With its bearings set firmly on Africa, a changing credit environment in Namibia will be an interesting challenge for the retailer. Work done by stock broking firm IJG Securities currently shows that out of the total credit extended for the year 2014, households have taken a considerable chunk totalling N$4.6 billion out of N$9.4 billion. Regulators are currently reigning in spending on what is deemed unproductive imports and all eyes are set on the Bank of Namibia this week to see whether a rate hike will come off. Upon releasing its interim results for the period ended 30 June 2014, HomeChoice International reported that its revenue increased 12.9% or N$860 million while EBITDA increased by 15.5% to N$239.7 million.