Shoprite’s Profit Jumps In Angola, Nigeria Despite #XenophobicAttacks

By Oladapo Okeowo with agency report

Shoprite, the multinational retail store, has reported a 15.5 per cent jump in its half-year profit, buoyed by sharp sales growth in Angola and Nigeria.

The South African business has seen its sales grow rapidly with other African countries accounting for more than one-fifth of the retailer’s total.

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 percent from a year ago, while Nigerian revenue jumped 60 percent.

The sales in Nigeria is more of interest considering the #XenophobicAttacks that has seen many Nigerians lose their lives and properties and the foreign exchange issues that have shot the prices of groceries up.

The country being in a recession and being affected by rising prices seems to not have negatively nor significantly affected the buying power of customers of Shoprite.

Nigeria and Angola 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 percent is unlikely,” Chief Executive Pieter Engelbrecht said in an investor presentation.

The business just scrapped plans to merge with Steinhoff International on Monday.

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.

Some analysts said there were no obvious synergies between the two businesses.