Loading...

Shoprite lifts profit despite commodity crunch

Aug 23 2016 21:04

(iStock)

Company Data

SHOPRITE HOLDINGS LIMITED [JSE:SHP]

Last traded 216
Change 1
% Change 0
Cumulative volume 1012996
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Shoprite profit rises 17% amid tough retail conditions

Shoprite triggers run in retail stocks

Shoprite jumps most since 2008

Wiese: I'm a rare breed – an Africa optimist

Shoprite tie up with Zambeef yields profits

Retailers look to Africa to survive volatile SA market

 

Johannesburg - Africa's largest retailer Shoprite Holdings [JSE:SHP] reported a 17% jump in full-year profit on Tuesday, shrugging off competition in South Africa and buoyed by strong sales in Angola.

Its thrifty stores helped it secure a South African market share of 32.8% in June, a company record, chief executive Whitey Basson said, as the chain kept costs tight and subsidised certain basic foodstuffs to keep the business of cash-strapped consumers.

Africa's most advanced economy, which accounts for four fifths of the company's sales, is forecast by the central bank to show zero growth this year, but Basson still sees room for growth for the company.

"We are not worried about the South African market maturing," he said in a webcast after pointing out that Shoprite had opened a net 49 stores in 2016 in its home market and was planning to open another 111 over the next two years.

The retailer trades in 14 other countries on the continent, and, despite weaker economic growth due to lower commodity prices, sales in this segment expanded by 32.6% compared with 10.9% at home.

Africa's two largest oil producers, Angola and Nigeria, were hit by foreign exchange shortages as earnings from crude sales collapsed.

But Shoprite's Angolan business produced its sharpest growth, as the retailer was able to replenish goods while other retailers were hamstrung by foreign exchange rules.

"Access to dollars allowed us to have stock on the shelves," said Basson, adding that the local currency was reinvested and the excess profits in Angola had paid for new store openings.

Shoprite's total number of supermarkets outside South Africa grew to 207, with most of the 22 new stores opened in Angola, Zambia and Nigeria, Shoprite said.

The firm's diluted headline earnings per share for the 53 weeks to end-June rose 17% to 899.7 cents from 769.1 cents.

Headline earnings per share is the main profit measure in South Africa which strips out certain one-off items.

Shares in Shoprite were up 1% to R201 by 12:13 GMT, 5% below the all-time high of R211.76 scaled on August 10.

Read Fin24's top stories trending on Twitter:

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

shoprite holdings  |  earnings report  |  retail
NEXT ON FIN24X

 
 
 
 

Company Snapshot

#SAVINGSMONTH

Five of SA's top financial brains, including SARB governor Lesetja Kganyago share their best savings habits.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

I am not in a position to save because:

Previous results · Suggest a vote

Loading...