SHOPRITE* HOLDINGS and recent r esult s were prett y much as expected: average. I t showed HEPS growth of 8.6% on the back of revenue up 12.5% and a modest dividend increase of 8.3%.
The numbers were hit by a weak South African consumer, Eskom load-shedding (that pushes costs higher as it has to run generators) and weak oil prices that impacted many of the African countries where Shoprite operates in.
That all said, i t remains the dominant food retailer in South Africa and, in fact, the continent as a whole, and with a trading margin of 5.23%, it is a global leader.
The problem, more than modest results, is a very expensive stock that trades on a price-to-earnings ( P/ E) r atio of over 22 t i mes. However as a core holding I would only exit if the business started to wobble - that it is not. So while it is expensive I hold and would look to add more at a price of around R125.