Shoprite Confirms Exit From Nigeria
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Shoprite Upbeat About Commendable Results Despite Lockdown Limitations; Confirms Exit From Nigeria
Shoprite Group has announced its unaudited results for the 26 weeks to 27 December 2020 in which sale of merchandise increased by 4.7% to R83.4 billion while its trading profit increased by 18.3% to R4.7 billion.
The Group confirms that the terms of sale have been concluded for the disposal of a 100% equity stake in its Retail Supermarkets Nigeria Ltd subsidiary. The transaction has been lodged with the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) for approval.
Management expects the transaction to be approved by the end of the 2021 financial year. Management is in the process of concluding a franchise agreement for the Shoprite brand to remain in Nigeria as well as an administration and services agreement to provide support to the new shareholders with operating the outlets.
Further analysis by Brand Spur revealed that Shoprite's diluted headline earnings per share (DHEPS) increased by 10.4% to 418.0 cents (Dec 2019: 378.6 cents). Also, the adjusted DHEPS* increased by 17.1% to 416.2 cents (Dec 2019: 355.3 cents).
The interim dividend per share declared increased by 22.4% to 191 cents (Dec 2019: 156 cents). Shoprite opened a net total of 60 new stores comprising 25 corporate and 35 franchise stores during the 12 months.
Pieter Engelbrecht, Chief Executive Officer
We are proud to report the Group’s sales increasing by 4.7% for the six months. Within that, our core Supermarkets RSA segment, representing 78.0% of Group sales, increased sales by 5.6%. Adjusting for the closure of our RSA LiquorShop business as a result of nationwide COVID-19 lockdown regulations, our Supermarkets RSA business grew sales by 7.8%.
This is an incredible result given that our customer base spans the entire South African food retail spectrum. Our South African supermarkets’ internal selling price inflation of 4.3% for the six months reflects our unwavering commitment to our customers on price. In true Shoprite style, it was a collective effort across our Shoprite, Usave, Checkers and Checkers Hyper banners and the team is to be commended.
The Supermarkets RSA business has achieved 22 months of uninterrupted market share gains and in the six months to 27 December 2020, the Group created a total of 4 305 new jobs.
In significantly more adverse conditions, our Supermarkets Non-RSA continuing operations achieved constant currency sales growth of 0.9%. The business remained vigilant, combating the challenges faced across Africa, however, currency devaluations again eroded much of our efforts.
We closed the last of our Kenyan stores in February 2021 and are at the approval stage in terms of the sale of our Nigeria supermarket operation. From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.
The successful launch of our Xtra Savings Rewards Programme in our South African based Shoprite supermarket chain following the success in Checkers, gave rise to another strategic milestone for the Group. Our Checkers and Shoprite Xtra Savings Rewards Programme now has the largest membership base in South Africa, with 17 million rewards members.
The opportunities that this programme affords the Group and its valued customers are significant and to say we are optimistic with regard to the future for our business, as a result, would be an understatement.
It is noteworthy that the Group increased trading profit by 18.3%, whilst making significant strides in other areas: borrowings declined by R5.9 billion to R5.5 billion, inventories reduced by R3.0 billion and we lived well within our means in terms of capital expenditure of R1.6 billion.
None of this was achieved in isolation. It was due to the collective effort of the more than 140 000 employees across the Group, represented in areas not limited to our aforementioned supermarket operations, who came together daily to serve our customers and sustain the growth of this great company.
It remained a difficult period in the context of COVID-19 which continued to weigh on our customers, our people and our operations and my acknowledgement and sincere thanks go out to all.
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