S.Africa's Shoprite posts profit jump on better Q2, declares dividend
JOHANNESBURG - South African supermarket group Shoprite Holdings reported a 10.4% rise in half-year earnings on Tuesday, helped by a much stronger second quarter as liquor sales resumed, and declared an interim dividend of 191 cents.
The country's biggest grocer also said it closed the last of its Kenyan stores in February and is awaiting regulators' approval on the sale of its Nigeria supermarket operation, although no other details were disclosed about the deal.
"Management is in the process of concluding a franchise agreement for the Shoprite brand to remain in Nigeria as well as an administration and services agreement to provide support to the new shareholders with operating the outlets," Shoprite said.
Shoprite has been reviewing its long-term options in Africa as currency devaluations, lower commodity prices and resultant high inflation have hurt customer affordability and weighed on earnings.
Diluted headline earnings per share (HEPS) from continuing operations rose to 418 cents in the six-months ended on Dec. 27, compared with a restated figure of 378.6 cents a year earlier.
After adjusting for foreign currency movements and hyperinflation HEPS grew by 17.1%.
Shoprite, which operates more than 2,300 stores across Africa, reported a 4.7% rise in half-year sales to 83.4 billion rand ($5.62 billion).
Home market sales, which account for over 78% of the company's total sales, grew by 5.6% as customers spent more at its discount brands and mid-to-upper market Checkers stores.
However, further growth was capped due to the complete ban on alcohol sales in July and subsequent trading restrictions.
The home supermarkets business has achieved 22 months of "uninterrupted" market share gains, the retailer said.
Sales at its loss-making operations in the rest of Africa declined 8.4% in rand terms due to ongoing currency devaluations in certain key regions like Angola.
($1 = 14.8466 rand)
BUSINESS REPORT ONLINE