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2 minute read
21 Feb 2017
11:02 am

Shoprite boosted by non-SA business


The company, which seems to have found a way to please both shareholders and shoppers, said profit was up by 10.9% at R2.44bn.

Picture: Courtesy Shoprite

Shoprite Holdings on Tuesday pointed to a very strong performance by its operations outside of South Africa as it recorded an increase in turnover of 14 percent, from R62.5 billion to R71.3 billion, for the six months to the end of December.

The supermarkets group said turnover at the non-South African business, which trades in 14 countries in the rest of Africa and Indian Ocean islands, had increased by 32.3 percent to R12.877 billion, which represents growth at constant currencies of 51.7 percent.

The statement reminded shareholders that Dr Whitey Basson, who is credited with transforming the company from an eight-store chain into the biggest food retailer in Africa in his 37 years at the helm, resigned as chief executive officer at the end of the reporting period.

Basson’s successor as chief executive, Pieter Engelbrecht, said trading profit for the group had been 19.2 percent higher at R3.907 billion. He said the rise in trading profit above turnover growth was the result of increased marketing activity, strict cost control, improved planning and supply line efficiencies.

He said these factors enabled the group to increase the trading margin from 5.2 percent to 5.5 percent “while continuing to provide the best value at highly competitive prices”.

The company noted that the widespread drought had added to pressure on internal inflation, which had increased from 2.7 percent to 7.4 percent, its highest level in several years.

“To assist price sensitive consumers and support low prices with value we continued to subsidise those basic foods most affected by price escalations,” the company said.

The company, which seems to have found a way to please both shareholders and shoppers, said profit was up by 10.9 percent at R2.44 billion.

Basic headline earnings per share came in at 462.5 cents, up 15.6 percent from 400.2 cents last time. A dividend of 180 cents per share was declared, representing an increase of 15.4 percent over the 156 cents of the corresponding period.

The group said it had opened a net 147 new stores during the past 12 months, bringing the total number of outlets to 2653. It reported the creation of 7144 additional jobs during the last year, bringing its total staff complement to more than 143 000.