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SHOPRITE HOLDINGS LIMITED - Group results for the year ended 30 June 2019

Release Date: 20/08/2019 09:00
Code(s): SHP     PDF:  
 
Wrap Text
Group results for the year ended 30 June 2019

SHOPRITE HOLDINGS LIMITED
(Reg. No. 1936/007721/06)
(ISIN: ZAE 000012084)
(JSE Share code: SHP)
(NSX Share code: SRH)
(LuSE Share code: SHOPRITE)
("the Group")

SHOPRITE HOLDINGS: GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2019

Key information

                                             % change   52 weeks   52 weeks
                                                            2019       2018

Sale of merchandise (Rm)                          3.6    150 395    145 104 
Trading profit (Rm)                             -14.3      6 876      8 024 
Operating profit (Rm)                            -8.2      6 911      7 527 
Profit before income tax (Rm)                   -13.7      6 339      7 347 
Income tax expense (Rm)                          -2.6      2 068      2 124 
Profit for the year (Rm)                        -18.2      4 271      5 223 
  Attributable to owners of the parent (Rm)                4 260      5 211 
  Attributable to non-controlling interest (Rm)               11         12 
Basic headline earnings per share (cents)       -19.6      780.8      971.4
Basic earnings per share (cents)                -17.9      768.2      936.0
Dividend per share (cents)                      -34.1      319.0      484.0


Pieter Engelbrecht, chief executive officer

Our core operations, Supermarkets RSA's sales growth of 4.9%, with like-for-
like sales growth of 1.9%, is a performance significantly impacted by our 
well documented first half challenges. With the strike in the DC behind us, 
our team worked tirelessly to restore performance in the second half. It is 
pleasing to report that we ended the year with our final quarter's sales in 
Supermarkets RSA growing by 9.4%. Our in-stock levels are now higher than 
prior to our system implementation and without compromising on our low price 
leadership, we achieved a second half trading margin in Supermarkets RSA of 
5.5%.

We've continued with our growth strategy to capture a larger share of the 
premium food segment through the ongoing Checkers repositioning. The number 
of Checkers stores in the new look FreshX format now totals 21. 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. Our focus on the 
core Shoprite and Usave customers, who we strive to serve with excellence 
daily, has remained strong as we continue to bring affordable food retail 
into the communities where our customers reside. 

Notwithstanding the much improved recent performance in our core 
Supermarkets RSA division, which generates 74.9% of our sales and grew 
second half sales by 7.4%, it was a testing year. A constrained economy, 
inventory shortages post industrial action and the implementation of a new 
enterprise wide IT system across our store base resulted in lost sales. With 
affordability remaining the top priority for our customers, we 
unquestionably stood by our lowest price promise. Selling price inflation in 
our Supermarkets RSA division for the year measured only 1.2%, and similar 
to last year, we traded throughout the year with many items in key 
categories in deflation. At year-end, the number of products priced lower 
than last year measured at 9 679.

Ongoing forex shortages, currency devaluations and the aftermath of rampant 
inflation in Angola and its ongoing impact on affordability took a further 
toll on our Non-RSA business. Supermarkets Non-RSA reported a trading loss 
of R265 million for the year. Despite no foreseen respite in short-term 
trading conditions in the region, we are committed to our customers in the 
14 Non-RSA countries in which we operate. We remain confident in the 
opportunity our entrenched position as Africa's leading food retailer will 
bring as the economic fortunes of the countries where we trade improve. 
Given the challenging global economic backdrop, we are remaining focused on 
growth opportunities in our home market, inclusive of our established 
African operations, rather than pursuing businesses in foreign geographies. 

Social responsibility has and always will be a priority for the Group. 
Amongst many initiatives focused on improving the lives of our fellow South 
Africans, it is noteworthy that this year we sold a record of 53 million 
subsidised deli meals and 58 million loaves of brown bread, both for under 
R5. We also created a further 3 175 employment opportunities whilst 
improving our focus on sustainability and governance. I am pleased to be 
able to say that we have the right people, resources and plans in place to 
entrench and grow our leading food retail position, both in South Africa and 
on the rest of the African continent and, therefore, to grow our 
profitability over the long term.

Declaration of ordinary dividend

The board has declared a final dividend of 163 cents (2018: 279 cents) per 
ordinary share, payable to shareholders on Monday, 9 September 2019. The 
dividend has been declared out of income reserves. This brings the total 
dividend for the year to 319 cents (2018: 484 cents) per ordinary share. The 
last day to trade cum dividend will be Tuesday, 3 September 2019. As from 
Wednesday, 4 September 2019, all trading of Shoprite Holdings Ltd shares 
will take place ex dividend. The record date is Friday, 6 September 2019. 
Share certificates may not be dematerialised or rematerialised between 
Wednesday, 4 September 2019, and Friday, 6 September 2019, both days 
inclusive.

In terms of the Dividends Tax, the following additional information is 
disclosed:

1.  The local dividend tax rate is 20%.
2.  The net local dividend amount is 130.4 cents per share for shareholders
    liable to pay Dividends Tax and 163 cents per share for shareholders
    exempt from paying Dividends Tax.
3.  The issued ordinary share capital of Shoprite Holdings Ltd as at the
    date of this declaration is 591 338 502 ordinary shares.
4.  Shoprite Holdings Ltd's tax reference number is 9775/112/71/8.

About this announcement

This short-form announcement is the responsibility of the directors of 
Shoprite Holdings Ltd. It is only a summary of the information in the 
summary consolidated financial results and does not contain full or complete 
details. Any investment decisions by investors and/or shareholders should be 
based on consideration of the summary consolidated financial results 
published on the Stock Exchange News Service (SENS) and 
http://www.shopriteholdings.co.za as a whole.

The summary consolidated financial results have been released on the JSE 
(https://senspdf.jse.co.za/documents/2019/jse/isse/SHP/ye2019.pdf) and are 
also available for viewing at https://www.shopriteholdings.co.za/content/
dam/SENS/2019/YE2019-Aug2019.pdf. Copies of the summary consolidated 
financial results may be requested from the company secretary 
(cosec@shoprite.co.za, tel +27 (0) 21 980 4284) at PO Box 215, Brackenfell, 
7561, South Africa.

By order of the board

CH Wiese          PC Engelbrecht
Chairman          Chief Executive Officer

Cape Town

20 August 2019

Sponsor
Nedbank Corporate and Investment Banking

Date: 20/08/2019 09:00:00
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