Shoprite earnings up 54.1% to 298.6c

A final dividend of 106 cents per share was declared, up 60.6% from the previous year's 66 cents. The total dividend for the year amounted to 155 cents, up 53.5% from a year ago.

Trading profit was up 43.7% to R2.297 billion and total turnover increased 22.3% to R47.652 billion.

"The past year was an excellent one for the Group both in terms of growth in turnover and profit despite major concerns experienced in the market such as global food shortages and a further drop in supplier service levels," said Whitey Basson, Shoprite CE.

He added that growth was driven by "substantial investments" made in the past few years and the retailer's strategic decision taken in October 2007 to cut margins on basic foodstuffs to alleviate the impact of price increases on especially lower-income consumers.

The decision to cut margins on basic foodstuffs led to "a sacrifice of R286 million in gross profit in the remainder of the year," Basson said.

Looking ahead, the group said tough trading conditions were not expected to change materially in the first half of the new financial year.

"Anticipated higher operating costs are expected to impact on profitability. Turnover growth is projected to slow in anticipation of intensified competition as well as the high growth rate in the number of customer transactions that is not sustainable at present levels," the group said.

At the same time the group said because of the strong fundamentals of the business, it would continue to perform well in the new financial year albeit not at the same level.

Source: I-Net Bridge

Published courtesy of