Shoprite’s market share up for ninth year
SHOPRITE Holdings’ full-year profit climbed 11 percent as the country’s largest food retailer increased its market share for the ninth consecutive year.
Headline earnings, which exclude one-time items, rose to R7.73 a share in the 12 months to June 30 from R6.98 a year earlier, the company said yesterday.
The average of 16 analyst estimates was R7.75. The board declared a final dividend of R2.43 a share, raising the year’s total payout 10 percent to R3.86.
“It is helped locally by an improved performance from the Shoprite brand,” said Kyle Rollinson, an analyst at Avior Capital Markets.
Sales through the Shoprite brand account for just over half of the company’s total supermarket revenue in South Africa. Other brands include Checkers, OK Furniture, House & Home and MediRite.
Local shopping chains have struggled in the past year as unemployment of about 25 percent, prolonged strikes and high levels of personal debt contributed to slow growth in household income.
Sales at the Shoprite brand, which caters to the lower- to middle-income groups, rose 8.5 percent.
The shares climbed as much as 3.1 percent to R162.99. They closed up 1.39 percent at R160.25 in Johannesburg.
Sales in Africa – outside of the retailer’s home market – were “negatively affected by the drop in oil prices in Angola and Nigeria, and their currencies depreciating against the US dollar”, Shoprite said. With 189 supermarkets beyond the borders of South Africa, sales in rand terms outside its home market climbed 14 percent.
The company had an exchange-rate loss of R132 million compared with a loss of R9m a year earlier, mainly due to the devaluation of the Angolan, Nigerian and Mozambican currencies against the dollar, Shoprite said.
Shoprite intends to continue “its strong expansion drive in Africa with 35 new stores planned” for African countries outside its home market by June 2016. – Bloomberg