Home Business Shoprite moves ahead with double-digit earnings and dividend growth

Shoprite moves ahead with double-digit earnings and dividend growth

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Shoprite Holdings – Africa’s largest grocer – on Tuesday delivered another good performance for the full year with double-digit growth in earnings and dividends for the year ending 3 July 2022.

The group’s spirits chains, Usave and upmarket Checkers (including on-demand delivery service Checkers Sixty60) were star performers with sales up 44.5%, 11.4% and 9.1% respectively.

Shoprite notes that the “strong underlying growth” in the LiquorShop segment in SA is due to “the fact that the business has been closed for fewer days this year. [FY2022] than last year due to Covid-19 regulations.”

The group says sales in its core South African supermarket segment, which accounts for 80% of sales, rose 10.1% (12.6% on a 52-week basis).

Grocery chains Shoprite and Usave, which account for 52.8% of the SA segment, increased sales by 7.2%.

However, in its latest results report, Sens Shoprite highlights: “From an accessibility perspective for our customers, our community-based Usave business increased sales by 11.4%.”

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It added that its “one-hour on-demand delivery Checkers Sixty60 app continued to innovate and grow sales despite an incredible growth trajectory over the past few years.”

Shoprite did not specifically refer to growth at Checkers Sixty60 in its Sens statement, but is likely to share more details during its upcoming results presentation.

The Checkers chain, which rivals Woolworths and Pick n Pay, could have shown double-digit growth but for the July unrest in KwaZulu-Natal and parts of Gauteng.

“Despite the fact that due to social unrest in July 2021, two large-format Checkers Hyper supermarkets are still closed, our Checkers and Checkers Hyper supermarkets business, which represents 39.8% of our core RSA segment, increased sales by 9 .1%,” the report notes.

Significant overall sales growth has seen the Shoprite Group increase its market share in FY22.

“We are proud of our 2022 results, particularly given our strong base, the extra week added to our reporting calendar last year and the headwinds created by the challenging local and global context,” commented Peter Engelbrecht, Shoprite Group CEO.

“In 52 weeks, our customers spent an additional 19.6 billion rand with us… This growth equates to 6.2 billion rand in increased South African market share over the period,” adds Engelbrecht.

In the 2022 financial year, Shoprite’s total sales were over 184 billion rand, an increase of 9.6%. This includes sales from its operations in other African countries (including discontinued operations).

Profit for the year increased by 21.5% to 5.73 billion rand (FY2021 – 4.71 billion rand), excluding discontinued operations.

Basic full-year earnings per share (excluding discontinued operations) increased 10.3% from 956.3 cents to 1,055 cents.

This led to a 10.3% increase in Shoprite’s dividend per share to 600 cents for the 2022 financial year.

“In recognition of the contribution of our people, we established the Shoprite Employee Trust during the year,” Sens said in a statement on Shoprite’s results.

“In addition, we have continued our share buyback program and advanced our proposed acquisition of Cambridge Food, Massfresh and Masscash Cash and Carry to the Competition Tribunal approval stage,” it said.

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