Shoprite H1 HEPS up 12.5% to 315.9c

Operating profit grew 13.2% to R2.477 billion.

Trading profit was up 16% to R2.510 billion‚ while turnover increased 13.8%to R46.723 billion.

The interim dividend per share declared was 123 cents - an increase of 12.8% from 109 cents in 2011.

Whitey Basson‚ chief executive‚ said the group succeeded in increasing total turnover by 13.8% in a highly competitive market.

Basson said the group achieved growth under far more trying conditions. "This is largely due to our on-going and very substantial investments in infrastructure over the last few years which are now producing handsome dividends. The capacity created by our growing network of distribution centres enables us to expand our store footprint at a rapid rate‚ both within and beyond the country's borders.

"The pace of growth in the first three months of the reporting period was not maintained in the second‚ when the retail sector as a whole experienced a slow-down in consumer demand‚ particularly in the month of December‚" he added.

The trading margin edged slightly higher to 5.4% compared to a year ago.

"The supermarket operation in South Africa grew sales by 11.5% and with internal inflation at 4.6%‚ this represents real growth of 6.9%. Seen against Nielsen's reporting that sales for the food retailing industry in South Africa grew by 8.2% in the six months to December‚ it is clear that the Group has gained additional market share‚" he added.

"At the same time it continued its strong growth on the rest of the continent‚ increasing turnover in constant currency terms by 23.5%. Overall‚ management is satisfied with the results achieved in the present climate‚" he said.

"We opened no fewer than 74 supermarkets in the 12 months to December‚ 56 inside South Africa and 18 beyond its borders. The 56 local supermarkets enabled the Supermarkets RSA division to grow turnover by 11.5% outpacing the 8.2% growth in the local food retail sector‚ thereby making further gains in market share‚" he added.

"Our expansion programme further assisted us in our goal for the Shoprite Group to generate viable job opportunities. During the period under review we managed to create over 6 700 new jobs‚ bringing our total staff compliment to almost 109‚000 employees.

Shoprite said all the divisions reported acceptable growth in both turnover and operating profit despite the tough trading conditions. The accent continued to be on growing the store network both in and outside South Africa as well as their supporting infrastructure. This included expanding existing distribution facilities while making substantial further investments in systems and software.

Looking ahead‚ the group expects the economic conditions which defined the trading environment in South Africa in the first six months to persist for at least the rest of the financial year as there are no indications that the cost pressures on consumers will ease in the short term

However‚ the board is confident that with the group's aggressive expansion programme‚ supported by the increasing benefits flowing from its sophisticated supply line‚ it will be able to maintain its present growth and profitability.

Outside SA the group's operations are expected to maintain its upward curve as new stores come on stream and consumers flock in increasing numbers to its stores.