Shoprite has released its group results for the year ended 30 June 2019, reporting lower-than-expected full-year earnings as inventory shortages in South Africa and currency devaluations in the rest of Africa weighed on profit.
Basic headline earnings per share (HEPS) for the year fell 19.6% to 780.8 cents, compared with a restated figure of 971.4 cents a year earlier.
Excluding hyperinflation seen in some of its African operations, the group said that it increased total turnover by 3.2% to approximately R150.6 billion in the period to June 2019.
The group’s core business, Supermarkets RSA, achieved 4.9% sales growth for the period with an improved second half in which sales increased by 7.4% on the back of better customer and volume growth, as well as an improvement in on-shelf availability and promotional effectiveness.
Other notable financials include:
- Sale of merchandise increased by 3.6% to R150.4 billion;
- Trading profit decreased by 14.3% to R6.9 billion;
- Diluted headline earnings per share of 779.9 cents, down by 19.6%;
- Dividend per share of 319 cents declared (2018: 484 cents);
- Opened a net of 126 stores during the 12 month.
While the group said that it will continue to focus on core Shoprite and Usave customers, it has seen significant success with the new Checkers FreshX stores.
This success will see the company revamp and open new stores in this format going forward, as it targets a wealthier South African market.
“The number of Checkers stores in the new look FreshX format now totals 21,” it said.
“We are most pleased with returns from these upgrades and, therefore, our medium to long- term target of 80 stores in this format remains unchanged.”
First launched at Johannesburg’s Mall of Africa in 2017, the FreshX concept stores have now been rolled out to a number of Checkers locations including Canal Walk and Fourways.
The concept stores were introduced by Checkers as a way for the company to gain market share among more affluent South Africans, with the idea proving so popular that the group now plans to revamp at least a third of its Checkers stores to the new look in the medium term.
Unlike traditional Checkers stores, the FreshX concept stores feature more upmarket furniture and signage – including benches and tables for customers to test samples.