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* Half-year diluted HEPS rises 10.4%
* Sales helped by upmarket Checkers chain
* No significant exits in rest of Africa in short term
* Shoprite brand to remain in Nigeria under franchise
agreement
(Recasts with homeward focus, adds details)
By Nqobile Dludla
JOHANNESBURG, March 16 (Reuters) - Shoprite Holdings'
SHPJ.J homeward pivot is showing signs of paying off as the
group reported a jump in half-year group profit and increased
domestic market share in South Africa after dialling back its
continental expansion.
South Africa's biggest grocer has been reviewing its
long-term options across Africa over the past year as currency
devaluations, lower commodity prices and high inflation have hit
household incomes and weighed on earnings. This has led to the company exiting Kenya and Nigeria,
restricting capital allocations to its supermarkets outside
South Africa and instead investing that money in its home
business, to take advantage of its dominance in the discount
grocery market and growing share in premium food.
Its South African supermarkets business has achieved 22
months of uninterrupted market share gains, Chief Executive
Pieter Engelbrecht said on Tuesday.
One of the star performers was its upmarket Checkers chain,
which has been investing aggressively in its same-day-delivery
online grocery service and expanding new-format stores with
premium fresh food and produce to challenge Woolworths' WHLJ.J
dominance in that area.
That business, which contributes 40% to the South African
business, increased sales by 11.1% in the six months to Dec. 27.
Overall sales in its home market, which accounts for the
bulk of the company's income, grew by 5.6%, also buoyed by a
strong performance from it discount Usave chain.
Across all of its businesses at home and abroad, Shoprite's
diluted headline earnings per share (HEPS) from continuing
operations rose 10.4% to 418 cents. After adjusting for foreign
currency movements and hyperinflation HEPS grew by 17.1%.
The retailer's business in the rest of Africa turned
profitable, aided by the reversal of some impairment provisions,
but sales declined 8.4% in rand terms due to ongoing currency
devaluations in certain key places like Angola.
In constant currency terms, sales inched up 0.9% on stronger
performances in Zambia, Ghana and Namibia.
No further significant disposals or exits from the continent
are expected in the short to medium term, finance chief Anton de
Bruyn told investors.
"It is still our long-term strategy to retain a core set of
non-RSA (South Africa) profitable countries," Engelbrecht added.
Shoprite, with more than 2,300 stores across Africa, is
awaiting regulators' approval on the sale of its Nigerian
supermarket operation, although no further details were
disclosed about the deal.
"Management is in the process of concluding a franchise
agreement for the Shoprite brand to remain in Nigeria as well as
an administration and services agreement to provide support to
the new shareholders with operating the outlets," the company
said.
($1 = 14.8732 rand)