Shoprite Holdings strike affects trading profit
Share this article:
DURBAN - Shoprite Holdings reported a decline of 14.3 percent decline in trading profit to R6.9 billion for the year to end June, negatively impacted by the strike in the first half of the year, slow economic growth in the country and currency devaluations in the rest of Africa operations. .
As a result, diluted headline earnings per share declined by 19.6 percent to 779.9 cents a share.
In the Non-RSA supermarkets, ongoing forex shortages, currency devaluations and the rampant inflation in Angola hit the profits in that region as the business reported a trading loss of R265 million for the year.
The group opened a net of 126 stores during the 12 months.
Chief executive Pieter Engelbrecht said the group’s core operations, Supermarkets RSA, increased its sales by 4.9 percent, with like-for-like sales growth up by 1.9 percent.
“The performance was significantly impacted by our well documented first half challenges. With the strike in the distribution centre behind us, our team worked tirelessly to restore performance in the second half,” Engelbrecht said.
He added that it was pleasing to report that the group ended the year with their final quarter sales in Supermarkets RSA growing by 9.4 percent.
“We remain confident in the opportunity our entrenched position as Africa’s leading food retailer will bring as the economic fortunes of the countries where we trade improve. Given the challenging global economic backdrop, we are remaining focused on growth opportunities in our home market, inclusive of our established African operations, rather than pursuing businesses in foreign geographies,” he said.
The group declared a dividend of 319c a share, down from last year’s 484c.
Its furniture division, inclusive of its Non-RSA business, increased turnover by 4 percent to R6.2bn. The group said as a result of the continued impact of the introduction of affordability assessments, credit participation reduced further to 12.7 percent of sales.
In South Africa, OK Furniture closed a net 13 stores after accounting for four openings.
House & Home closed six stores. On a net basis outside South Africa, the division added no stores. The group’s other operating segments, which include OK Franchise, MediRite Pharmacy and Checkers Food Services, achieved 10 percent growth.
Rebranded OK Franchise opened a net 36 stores with the base now totalling 398 stores throughout South Africa.
Outside South Africa, OK Franchise added a net 6 stores, with a base of 62 at year-end.