South Africa’s Shoprite Group has posted a 43% increase in earnings per share during the first half of its fiscal year – at the top end of its previous forecast.
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For the six months to end December the group’s EPS increased to 184 cents, while the board declared a dividend of 70 cents per share payable to shareholders on 16 March.
Shoprite ended the period with net profit of ZAR962m (US$95.6m), an increase of 40.8% over the comparable six months in 2007.
CEO Whitey Basson attributed the company’s “strong performance” to its low price-positioning attracting increasing numbers of “price-sensitive consumers”.
Turnover growth comfortably exceeded internal food inflation, the company said, which grew by 16.9% against 9.2% in the corresponding period.
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By GlobalDataBasson said the group had experienced strong growth in all its divisions with the strongest from its supermarket operations outside the RSA where turnover grew by 54.3% supported by a weaker rand.
“It was not the result of growth in the size of the market but because of the group’s low price-positioning attracting increasing numbers of price-sensitive consumers across the income spectrum as well as managing its cost base efficiently on the higher turnover,” Basson said yesterday (18 February).
All three of the group’s food chains in South Africa, which represent 77.6% of its total business, performed “above the rest of the market”, with customer transactions 8.5% higher.
Shoprite said it is pursuing its growth strategy on the continent and negotiations for the opening of a number of new outlets are at an advanced stage.
“I do believe that whatever happens, we are better placed than most to weather the storm and to achieve satisfactory results for the remainder of the financial year,” Basson added.
