Durban - Holdsport said it was going to continue with its expansion strategy in 2017 by opening three new stores, despite facing low levels of consumer confidence, weak economic growth and a sporting goods industry which was intensely competitive.
The Holdsport group comprises the retail divisions Sportsman’s Warehouse and Outdoor Warehouse, and a wholesale division that includes the First Ascent, Capestorm, Second Skins and African Nature brands.
The group said its business had been affected by a string of challenges with household budgets under pressure due to high food price inflation, rising utility costs and increasing taxation, while real incomes stagnated with a low growth environment.
“The recent political disruptions and subsequent downgrades are concerning and may result in muted sales growth over the medium term. In these difficult times, the group is firmly committed to its strategies to enhance returns for our stakeholders,” it said.
The group released its financial year results to end February, which were dominated by a challenging retail environment.
Total sales increased by 5.8 percent to R1.83 billion, with retail sales increasing by 4.4 percent to R1.75 billion.
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The group said its sales growth during the year follows strong growth in the comparable 2016 financial year. Like-for-like retail sales grew by 1.8 percent, while the retail divisions faced price inflation of about 8.1 percent.
Time weighted trading increased by 3.4 percent, relative to the prior year. Core headline earnings of 522.3 cents per share decreased by 2.3 percent.
Core headline earnings excluding the effect of foreign exchange adjustments were 522.3c per share, a decrease of 2.3 percent from the 534.5c for the previous financial year.
Operating profit decreased by 11.4 percent to R273.7 million while core headline earnings amounted to 489c per share, a 10.9 percent decrease on the previous year.
The directors declared a final gross dividend of 220c per share, up by 10percent as compared to 2016. Holdsport shares eased 3.02 percent on the JSE on Friday to close at R61.