Shoprite Announces Interim Results, Gains Market Share as Store Expansion Continues

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Key information

  • Sale of merchandise increased by 7.0% to R81.2 billion.
  • Earnings before interest, tax, depreciation, and amortization (EBITDA) increased by 5.3% to R6.8 billion.
  • Trading profit excluding hyperinflation increased by 7.0%.
  • Trading profit on a reported basis decreased by 3.9% to R4.0 billion.
  • Diluted headline earnings per share, excluding hyperinflation, increased by 15.7% from 327.8 cents to 379.3 cents.
  • Diluted headline earnings per share declined by 2.6% to 372.4 cents.
  • Dividend per share of 156 cents declared (2018: 156 cents).
  • Opened a net 82 corporate-owned stores during the 12 months (2018: 86).
  • With regards to Nigeria, the impact of store closures and subsequent reduction in customer count, both during and after the September Xenophobic attacks, resulting in a difficult half with sales declining by 8.1% in constant currency terms.

Shoprite Announces Interim Results, Gains Market Share as Store Expansion Continues - Brand Spur

Pieter Engelbrecht, chief executive officer:

We are very proud to report the Group’s 7.0% increase in merchandise sales for the six months to 29 December 2019. The R81.2 billion in sales was achieved on the back of 4.4% growth in the volume of products sold and 2.1% growth in the number of customers. EBITDA, a more comparable measure after the adoption of IFRS 16: Leases, increased by 5.3% to R6.8 billion. This was a satisfactory performance given the 1.1% market share gains to 31.6% in Supermarkets RSA which achieved sales growth of 9.8%.

Our Group strategy to capture a larger share of South Africa’s premium food retail segment continues to be one of our drivers of growth as reflected particularly in the Checkers brand, together with Hypers, growing sales by 11.2%. It’s been an exciting six months for the Checkers brand with significant milestones reached in support of our long-term growth strategy. The Xtra Savings Rewards Programme was launched in October and has been very well received with 3.8 million customers have already signed up. In another first for South African Supermarkets, our pioneering one-hour grocery delivery service, Sixty60, was launched in November in 8 stores. Although, still in the early stages, we believe this mobile e-commerce solution offering unrivaled convenience for shoppers holds much promise.

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Our Supermarkets Non-RSA operating segment, comprising operations in 14 countries across the African continent, recorded positive sales growth of 4.8% in constant currency terms. Sales declined by 3.1% in rand terms.

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The Group’s trading margin of 5.0% remained strong, underpinned by an 8.7% increase in gross margin and effective cost control.

Outside of our retail operations, our focus is increasingly on our environment, governance, social responsibility, and our continued goal to improve the lives of the people in key Shoprite communities. We remain pleased to report that despite the current difficult economic climate, Shoprite continued to create new jobs and participate in the YES (Youth Employment Service) program.

Read Also:  Shoprite launches Xtra Savings rewards programme
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Shoprite Announces Interim Results, Gains Market Share as Store Expansion Continues - Brand SpurShoprite Announces Interim Results, Gains Market Share as Store Expansion Continues - Brand Spur

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1 COMMENT

  1. […] Africa’s largest supermarket chain, Shoprite is closing a second branch in Kenya, laying off 115 workers. The first branch closed in April; there are now two stores left in the country. […]

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Shoprite Announces Interim Results, Gains Market Share as Store Expansion Continues - Brand SpurShoprite Announces Interim Results, Gains Market Share as Store Expansion Continues - Brand Spur

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