Our opinion on the current state of CHOPPIES(CHP)

Choppies (CHP) is a Botswana-based grocery retailer with 212 stores operating in South Africa, Botswana, Zimbabwe, Zambia, and Kenya. It has a primary listing on the Botswana Stock Exchange (BSE) and a secondary listing on the JSE. The grocery market in Southern Africa is highly competitive, and Choppies, being a relatively small player, faces challenges in competing with larger chains that have greater buying power.

The company was suspended from trading on the JSE for two years (from November 2018) due to various issues, but resumed trading on 13th November 2020. In its results for the year ending 30th June 2024, Choppies reported a 31.7% increase in revenue. However, headline earnings per share (HEPS) from continuing operations declined by 20.7%. The company attributed the positive impact on group results to the acquisition of Kamoso, while the economic difficulties in Zimbabwe negatively affected its performance.

Choppies is clearly recovering from a difficult period, including its prolonged suspension on the JSE. Trading volumes are still relatively low, with about R38,000 worth of shares changing hands daily on average, making it a risky option even for small investors. However, the increasing trading volumes suggest that investor interest may be growing, which could improve liquidity over time.