Sechaba board of directors has resolved to change the company’s financial year end from March 31st to 31st December, the company disclosed on Wednesday.
The company, which is a parent to Kgalagadi Breweries Limited (KBL) has advised stakeholders that the current financial year will end on the 31st of December 2016. The BSE listed company will publish its current financial year results in March 2017, added a statement. The board has not disclosed reasons for the change in reporting period. On another matter, Sechaba’s parent company, SABMiller has bought Belgium-based brewer, AB InBev in a marathon bid that took months to complete. AB InBev’s reporting period runs from January to December every year.
The change in reporting period comes weeks after Sechaba reported a drop in profits for the interim results to September 2016. Profits for the first six months of its financial year declined by over 40percent as the domestic regulations continue to bear heavily on its operations.
According to the company, profits plummeted by 40, 7 percent as volumes declined by 0, 1 percent. Through its subsidiary, KBL Sechaba produces clear and opaque beers for the domestic market. Directors made it clear that industry regulations have hit them hard and the company is trying all available avenues to spring back to life. “The decline in the financial performance of the company is mainly attributable to the current regulatory environment in which the company operates,” said the BSE-listed outfit.
The regulations in question are the Alcohol Levy which is currently at 55 percent.
The Levy affects clear beer sales. There are also the traditional beer regulations which have negatively impacted opaque beer which is popular among the low-income earners in townships and villages. For the period under review, clear beer volumes managed to grow marginally by 6 percent, suggesting consumers spent more time in bars and bottle stores between April and September this year. Meanwhile, fruit beverages, sparkling soft drinks and traditional beer volumes declined in the period under review.
Despite the massive fall in profits, the company shareholders will smile all the way to the bank. The board chaired by Thabo Matthews has declared a dividend of 30 thebe per share.
Three directors of Sechaba Holdings Limited have quit the listed brewer less than two years after they were appointed to the board, it emerged on Tuesday. Chairman Batlang Mmualefe, independent non-executive director Boyce Sebetela and fellow board member and non-independent executive director Lepalisa Makepe are no longer part of the board after tendering resignation letters to the listed company.
In a statement on behalf of the board, company secretary Gorata Hlope said Mmualefe tendered his resignation with effect from 25 September 2015. The past Sechaba chairperson joined the board in 2013. Hlope could not be reached for comment to elaborate on reasons for the resignation of the board chairperson who has in the past disclosed that the company’s profitability is under pressure due to alcohol levy and traditional beer regulations. In Mmualefe’s position, the group has appointed Thabo Matthews who joined the board just seven months ago. The former Barclays Botswana, Mascom Wireless and Delloite senior executive has a BA in computer science and economics. Debswana strategy manager, Sebetela is no longer Sechaba board member.
He joined the board of the beer producing company in May last year. No detailed reasons have been given for his departure, after being given the nod by shareholders to give the strategic direction late last year. He left on 25th September 2015 a day after a board meeting of the company. Barclays Africa finance executive Makepe has also parted ways with St Louis and Black Label producing group. This financial guru became part of Sechaba board last year May. The board of Sechaba has heaped praise on Mmualefe, Makepe and Sebetela. “The board conveys sincere appreciation to the above for their strategic guidance,” said a statement. Meanwhile, University of Cape Town (UCT) educated Bafana Molobo has been appointed to the board as an independent non-executive director effective 25 September 2015.
Meanwhile, Sechaba parent company, SABMiller rejected a buyout proposal from Anheuser-Busch InBev (AB InBev) that would have created the world’s single largest beer brewer by volume, Business Day online edition has reported.The rejection of the £42.15 per SABMiller share either opens the door for a higher offer, or the possibility of a hostile takeover attempt by the world’s largest brewer, said the paper. “The (SABMiller) board, excluding the directors nominated by Altria Group Inc, has unanimously rejected the £42.15 (about R864) proposal as it still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects,” said SABMiller in a statement hours after AB InBev’s own media briefing in which it publicly tabled its proposal for the merger. On Wednesday, Sechaba shares closed the day stable at 2850 at the domestic bourse.