Business News 23.8.2016 09:55 am

Shoprite trading profit up 15% to R7.2bn

Picture: Courtesy Shoprite

Picture: Courtesy Shoprite

Shoprite chief executive Whitey Basson ascribed the overall achievement to the Group’s strengthening of its price advantage.

Shoprite Holdings on Tuesday reported an increase in trading profit of 15 percent to R7.278 billion for the 12 months to June, compared to 10.7 percent profit increase to R6.3 billion last year, as the group made a record one billion transactions in a single year.

Shoprite was reporting its annual results for 12 months, but added an extra week as a general rule that most international retailers report their results utilising full weeks.

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Africa’s largest grocer’s trading margin remained stable at a creditable 5.6 percent.

Shoprite said the 12 months to June had been a difficult period economically, not only for South Africa, but also for the African continent and the world at large.

It said South Africa – its core operations representing more than 80 percent of total supermarket turnover – remained caught in a low-growth trap because of external factors beyond its control, such as the continued slowdown in the Chinese economy and the uncertainty following Brexit.

Shoprite’s turnover increased 14.4 percent from R113.694 billion to R130.028 billion, and diluted headline earnings per share rose 17 percent from 769.1 cents to 899.7 cents.

Turnover growth in non-South African countries was negatively affected by the drop in oil prices in Angola and Nigeria while their currencies also depreciated against the US dollar.

Shoprite chief executive, Whitey Basson, ascribed the overall achievement to the group’s strengthening of its price advantage.

“Equally gratifying as the results we have achieved, is the growing trust placed in us by our customers, with the latest AMPS figures showing that 76 percent of the adult South African population shop at one of our supermarket brands – up from 72 percent a year ago,” Basson said.

“Despite intense local competition we managed to keep market share above 30 percent. Rigorous cost control and more effective operating methods have enabled us to achieve this without compromising our trading profit margin which remained at 5.6 percent.”

Shoprite declared a final dividend of 296 cents an ordinary share, payable to shareholders on September 12, bringing the total dividend for the year to 452 cents an ordinary share.

– African News Agency (ANA)

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