Wrap Text
Operational update for the six months ended 27 December 2020
SHOPRITE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Reg. No. 1936/007721/06
ISIN: ZAE000012084
JSE share code: SHP
NSX share code: SRH
LuSE share code: SHOPRITE
("the Group")
OPERATIONAL UPDATE FOR THE SIX MONTHS ENDED 27 DECEMBER 2020
For the six months to 27 December 2020 the Shoprite Group increased
total sale of merchandise by 4.7% to approximately R83.4 billion.
Excluding the impact of the closure of the RSA LiquorShop business due
to COVID-19 lockdown regulations, the Group increased total sale of
merchandise by 6.3%.
% Sales growth over the
corresponding period last year
H1 ended H1 ended Q1 ended Q2 ended
Approximate sales from Dec 2020 Dec 2020 Sep 2020 Dec 2020
continuing operations Rbn % % %
Total Group (including
Supermarkets RSA LiquorShop) 83.4 4.7 3.0 6.1
Total Group (excluding
Supermarkets RSA LiquorShop) 6.3 6.0 6.6
By Segment:
Supermarkets RSA
(including LiquorShop) 65.1 5.6 3.3 7.6
Supermarkets RSA
(excluding LiquorShop) 7.8 7.2 8.3
Supermarkets Non-RSA 8.6 (8.4) (8.4) (8.4)
Furniture 3.8 15.7 20.6 11.9
Other operating segments 5.9 10.0 9.9 10.2
Total operating segments 83.4 4.7 3.0 6.1
The following information provides context to the overall sales growth:
Supermarkets RSA
- The Group's core business, Supermarkets RSA, contributing 78.0% to
Group sales, achieved sales growth of 5.6% (like-for-like 4.8%).
- Supermarkets RSA, excluding LiquorShop sales, achieved sales growth
of 7.8% (like-for-like 5.7%).
- Checkers and Checkers Hyper reported sales growth of 11.1%.
- Shoprite and Usave reported sales growth of 5.6%.
- The Group's LiquorShop business' sales declined by 21.8%. Due to
the COVID-19 nationwide lockdown regulations, the Group's LiquorShop
business was required to close for trade on Fridays and/or weekends and
more recently, close completely. The total number of days our liquor
business was closed totalled 79 days over the six months: 60 days
during the first quarter and 19 days during the second quarter.
- Internal selling price inflation measured 4.3%, a result of second
quarter inflation declining slightly to 4.2% from the 4.4% reported
for the first quarter.
- Supermarkets RSA opened a net of 45 stores.
Supermarkets Non-RSA
- Supermarkets Non-RSA increased sales in constant currency by 0.9% as
pre-existing challenges from a macro economic and consumer
affordability perspective were exacerbated by COVID-19 and its
associated lockdown restrictions.
- Supermarkets Non-RSA's sales declined by 8.4% in rand terms and
contributed to 10.2% of Group sales.
- Supermarkets Non-RSA's net store base was unchanged.
Furniture
- The Group's Furniture segment, made up of OK Furniture and House & Home,
increased sales by 15.7% (like-for-like 17.3%).
- Whilst growth remained high overall, growth during the second quarter
was impacted by an already high base in December 2019.
- Credit sales participation declined to 11.8% (Dec 2019: 13.7%).
- The Furniture segment closed a net of ten stores.
Other operating segments
- The Group's Other operating segments, comprising OK Franchise,
Transpharm, MediRite Pharmacies, Checkers Food Services (CFS) and
Computicket, reported sales growth of 10.0%.
- The MediRite Pharmacies and Transpharm business traded well. Both CFS
and Computicket were negatively impacted by COVID-19 lockdown
regulations given their reliance on tourism, hospitality, travel and
eventing.
- The Group's OK Franchise division remained resilient, achieving sales
growth of 8.1% despite the impact of the liquor lockdown restrictions.
The OK Franchise business added a net of 28 stores.
Update on discontinued operations - Nigeria
The Group communicated previously the decision to sell either all or a
majority stake in its Retail Supermarkets Nigeria Limited subsidiary. We
hereby confirm that the terms of sale have been concluded and that the
transaction has been lodged with the Nigerian Federal Competition and
Consumer Protection Commission (FCCPC) for approval. Management expects the
transaction to be approved by the end of the 2021 financial year.
Voluntary earnings guidance
The following items impacted the results for the period under review:
- COVID-19 related costs in the amount of approximately R180.1 million.
- The provision for impairment against the Furniture segment's instalment
debtors book declined to approximately 47.2% (June 2020: 50.5%).
- Net expenditure of a capital nature of approximately R327 million.
- The Group's effective tax rate reduced to approximately 29.2%.
Furthermore, to facilitate comparison, we have included the calculation of
an adjusted basic HEPS which excludes the after tax effect of exchange rate
differences and the impact of hyperinflation.
Estimated Restated* Expected
Dec 2020 Dec 2019 change
cents cents %
Earnings including
discontinued operations:
Basic EPS 383.7 to 420.9 372.1 3.1 to 13.1
Basic HEPS 410.2 to 448.4 381.9 7.4 to 17.4
Adjusted basic HEPS** 412.3 to 448.3 360.5 14.4 to 24.4
Earnings from
continuing operations:
Basic EPS 375.6 to 411.7 375.2 0.1 to 9.7
Basic HEPS 400.6 to 438.6 379.0 5.7 to 15.7
Adjusted basic HEPS** 400.1 to 435.7 355.6 12.5 to 22.5
* Restated for the change in guidance contained in SAICA Circular
1/2019: Headline Earnings relating to the IFRS 16: Leases rule.
** The adjusted basic HEPS and continuing operations information provided,
constitutes pro forma financial information in terms of the JSE Listing
Requirements.
Impact of the Group's pro forma constant currency disclosure
The Group discloses unaudited constant currency information to indicate the
Supermarkets Non-RSA operating segment performance in terms of sales growth,
excluding the effect of foreign currency fluctuations. To present this
information, current period sales for entities reporting in currencies other
than ZAR are converted from local currency actuals into ZAR at the prior
year's actual average exchange rates on a country-by-country basis.
The table below sets out the percentage change in sales, based on the actual
results for the period in reported currency and constant currency for the
following major currencies. The total impact on Supermarkets Non-RSA is also
reflected after consolidating all currencies in this segment.
Reported Constant
% Change in sales on prior period 26 weeks currency currency
Angola kwanza (39.5) (15.5)
Mozambique metical (6.1) (2.9)
Nigeria naira (1.0) (4.8)
Zambia kwacha (12.7) 15.8
Supermarkets Non-RSA including discontinued operations (7.4) 0.1
Supermarkets Non-RSA continuing operations (8.4) 0.9
Statement on pro forma financial information
The pro forma financial information contained in this announcement,
which is the responsibility of the Group's directors, has been prepared
for illustrative purposes only and may not fairly present the Group's
financial position, changes in equity, cash flows or results of
operations.
The information contained in this announcement has not been reviewed or
reported on by the Group's external auditors.
Group interim results release, presentation timing and registration link
The Group plans to publish its 2021 interim results on SENS by 8h00 on
Tuesday, 16 March 2021. The 2021 interim results webcast presentation will
follow at 9h00.
Shoprite welcomes all who would like to attend to register for the webcast
via http://www.corpcam.com/shoprite16032021. Alternatively, registration via
the company website www.shopriteholdings.co.za will be possible.
15 February 2021
Cape Town
Sponsor: Nedbank Corporate and Investment Banking
Shoprite Holdings Limited Tel: 021 980 4000
Natasha Moolman - Group Investor Relations Manager
Anton de Bruyn - Chief Financial Officer
Pieter Engelbrecht - Chief Executive Officer
Date: 15-02-2021 08:30:00
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