South African retailer Shoprite reported a 15.5 per cent jump in half-year profit, buoyed by sharp sales growth in Angola and Nigeria. Shoprite just scrapped plans to merge with Steinhoff International on Monday.
Shoprite, which sells mostly groceries, has grown rapidly outside its home market with sales in other African countries now accounting for more than a fifth of the retailer’s total.
A merger with Steinhoff International would have created an African retail giant, but the plan was called off after minority shareholders complained that the proposed deal would offer little value for Shoprite, Reuters reported.
Some analysts said there were no obvious synergies between the two businesses.
Shoprite reported diluted headline earnings per share of 460 cents for the six months to end-December in line with forecasts and compared with 398.2 cents a year earlier.
Sales in Angola surged 155 per cent from a year ago, while Nigerian revenue jumped 60 per cent.
Both are important growth markets for the retailer, but experienced a shortage of foreign exchange as oil revenues remained under pressure affecting economic growth.
However, Shoprite said it was able to fund its stock requirements from its external balance sheet and kept shelves stocked while many traders in the region struggled.
“It was exceptional growth and we must be cautious because to continue at 150 per cent is unlikely,” Chief Executive Pieter Engelbrecht, said in an investor presentation.
He took the reins from stalwart Whitey Basson in January.