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Shoprite steams ahead, with double-digit earnings and dividend growth
Shoprite Holdings – Africa’s largest grocer – on Tuesday delivered another robust full-year performance, with double-digit growth in headline earnings and dividends for the year ended 3 July 2022.
The group’s liquor, Usave and upper market Checkers chains (including the Checkers Sixty60 on-demand delivery service) were the stellar performers, boasting sales growth of 44.5%, 11.4% and 9.1%, respectively.
Shoprite notes that the “strong underlying growth” in its LiquorShop segment in SA is due to “the fact that the business was closed for less days this year [FY2022] than last year, due to Covid-19 regulations”.
The group says that in its core South African supermarket segment, which accounts for 80% of its sales, sales increased by 10.1% (12.6% on a 52-week base).
The Shoprite and Usave grocery chains, which make up 52.8% of the SA segment, increased sales by 7.2%.
However, in its latest Sens results announcement Shoprite further highlights: “In terms of accessibility for our customers our community-based Usave business increased sales by 11.4%”.
Checkers Sixty60
It adds that its “on-demand one-hour delivery app Checkers Sixty60 continued to innovate and grow its sales despite its incredible growth trajectory over the past few years”.
Shoprite did not specifically cite the growth in Checkers Sixty60 in its Sens statement, however, is likely to share more details at its upcoming results presentation.
The Checkers chain, which is taking Woolworths and Pick n Pay head on, could have seen double-digit growth if it had not been for the July unrest in KwaZulu-Natal and parts of Gauteng.
“Despite having two large format Checkers Hypers still closed due to the July 2021 social unrest, our Checkers and Checkers Hyper supermarket business, which makes up 39.8% of our core RSA segment, increased sales by 9.1%,” it notes.
The strong overall sales growth saw Shoprite group increasing its market share for FY2022.
“We are proud of our 2022 results especially considering our high base, the additional week included in our reporting calendar last year and the headwinds presented by a challenging local and global context,” comments Pieter Engelbrecht, Shoprite group CEO.
“On a 52-week basis our customers spent an additional R19.6 billion with us… This growth equates to R6.2 billion in South African market share gains for the period,” adds Engelbrecht.
Sales surge
Group-wide Shoprite clocked sales of over R184 billion in FY2022, up 9.6%. This includes sales from its operations in other African countries (including discontinued operations).
Profit for the year surged 21.5%, to R5.73 billion (FY2021 – R4.71 billion), when discontinued operations are excluded.
Full-year basic headline earnings per share (excluding discontinued operations) increased 10.3%, from 956.3 cents to 1 055 cents.
This saw Shoprite’s dividend per share increasing 10.3%, to 600 cents for FY 2022.
“In recognition of the contribution made by our people we established the Shoprite Employee Trust during the year,” Shoprite says in its results Sens statement.
“Added to this we’ve continued with our share buyback programme and advanced our proposed acquisition of Cambridge Food, Massfresh and Masscash Cash and Carry to the Competition Tribunal approval stage,” the group notes.
Despite the strong full-year financial performance, Shoprite’s share price fell over 7% on Tuesday, trading below R218 a share in the afternoon. It remains to be seen if this drop is linked to profit-taking or the market having higher expectations for better FY2022 dividends.
