Sapo 2018 strike has knocked HomeChoice profit

Pretoria News - - BUSINESS TECHNOLOGY - SANDILE MCHUNU [email protected]

HOMECHOICE took a knock dur­ing the year to end De­cem­ber as a re­sult of the 2018 strike by the SA Post Of­fice (Sapo) as gross profit mar­gin fell to 47.4 per­cent from 49.6 per­cent a year ear­lier. The had strike left it with higher than normal open­ing stock hold­ings at the be­gin­ning of the year, it said.

“The de­ci­sion to ag­gres­sively pro­mote and clear the sur­plus stock re­sulted in higher mark­downs and a reduction in the gross profit mar­gin for the year,” the group said. HomeChoice said the Sapo strike had also con­trib­uted to a 14.1 per­cent fall in head­line earn­ings per share to 436 cents a share and a 14 per­cent de­crease in head­line earn­ings to R455 mil­lion.

HomeChoice, a lead­ing par­tic­i­pant in south­ern Africa’s re­tail home­wares and fi­nan­cial ser­vices sec­tors, re­ported a 7.3 per­cent in­crease in rev­enue to R3.5 bil­lion, boosted by strong loan dis­burse­ments growth of 27 per­cent. Its re­tail sales had in­creased 4.9 per­cent to R2bn.

The group said fees from an­cil­lary ser­vices had in­creased 18.6 per­cent, while stand­alone in­sur­ance in­come had surged by 22.2 per­cent in line with its di­ver­si­fi­ca­tion strat­egy to gen­er­ate ad­di­tional non-in­ter­est-bear­ing in­come. The group de­clared an an­nual div­i­dend of 166c, 14.4 per­cent lower com­pared to last year.

Chief ex­ec­u­tive Shirley Maltz said the re­sults were a re­flec­tion of tough eco­nomic con­di­tions and op­er­a­tional chal­lenges. “In this en­vi­ron­ment it is crit­i­cal not to de­vi­ate from your longterm vi­sion and we are pleased with the strate­gic trac­tion that we have gained in 2019,” Maltz said.

“We have been suc­cess­ful in ac­cel­er­at­ing our dig­i­tal trans­for­ma­tion, in­creas­ing the re­tail foot­print and im­prov­ing our cus­tomer ex­pe­ri­ence. Our brands and prod­ucts con­tinue to res­onate with cus­tomers, with our to­tal ac­tive cus­tomer base in­creas­ing to 912 000 cus­tomers, keep­ing us well on track to achieve our tar­get of 1.2 mil­lion cus­tomers by 2022,” she said.

HomeChoice said one of the high­lights for the year had been ex­tend­ing R2bn of credit through dig­i­tal plat­forms. Maltz said a quar­ter of HomeChoice Re­tail cus­tomers were now reg­is­tered for dig­i­tal ac­cess, with FinChoice reg­is­tra­tions up by 86 per­cent.

Look­ing ahead, the group said it would con­tinue to find op­por­tu­ni­ties to de­liver value and a great ex­pe­ri­ence to its cus­tomers de­spite the sus­tained muted eco­nomic out­look.

“The vi­brant in­for­mal econ­omy con­tin­ues to show growth as more in­di­vid­u­als sup­ple­ment their pri­mary in­come with an in­come de­rived from the in­for­mal sec­tor. Po­ten­tial risks from the Coro­n­avirus are be­ing ac­tively man­aged and we cur­rently do not fore­see it hav­ing a ma­te­rial im­pact on the group,” Maltz said.

HomeChoice shares closed un­changed at R35.49 on the JSE yes­ter­day.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.