Johannesburg - Shoprite Holdings [JSE:SHP], Africa's biggest
grocer, reported a 12.5% rise in first-half profit, helped by a robust
performance from its stores outside its mainstay South African market.
Shoprite, which also runs stores in several other African
countries, said headline earnings per share totalled 316 cents in the six
months to end-December compared with 280.8 cents a year earlier.
Sales rose 13.8% to R46.7bn, boosted by 28.2% sales growth
in supermarkets outside South Africa and a weaker rand.
But shares in Shoprite, which have dropped by about 14% so
far this year, skidded 2.7% to R173.28 by 07:25 GMT as profit growth fail to
justify high multiples.
The stock would have to fall by a another 5% to meet what
Thomson Reuters StarMine estimates as a level that justifies Shoprite's
After more than two years as investors' darlings, South
African retailers are falling out favour on growing concerns about the strength
of debt-fuelled consumer spending.
Shoprite said it would be able to main its current growth
and profitability in the second half thanks to aggressive new store openings
and a cost-efficient supply chain.
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