Advertise with fastmoving.co.za
 
 

Shoprite CEO Whitey Basson
Shoprite CEO Whitey Basson

Whitey Basson leaves behind ‘excellent’ team

RETAILER NEWS

By Ann Crotty - Feb 24th 2017, 16:44

The Shoprite icon delivers the last results under his watch, with numbers blowing past expectations and operations thriving in the rest of Africa.  

Whitey Basson’s parting gift to Shoprite shareholders, an outstanding set of interim results, saw the share price surge 5% to a high of R197.40 in early trading on Tuesday.

The share eased back later to end the day 3.52% higher at R194.62, more than recovering the ground lost in the wake of the announcement about a possible merger with global furniture group Steinhoff.

Retail analyst Syd Vianello said the more useful gift from Basson was the excellent young team he had built around him. "This is a great, young, committed team and I’m sure shareholders will feel comforted that management of the group remains in good hands."

Basson has driven Shoprite’s spectacular growth since he joined in 1979. He retired as CEO at the end of December but will have a nonexecutive role as vice-chairman.

The strong performance in the six months to end-December might have made a deal with Steinhoff almost impossible without offering a hefty premium for Shoprite, which was reportedly not on the cards.

Ahead of the presentation chairman Christo Wiese said he had learned a few lessons from "the latest little flutter with Shoprite and Steinhoff". He was happy with the Shoprite results and excited about the company as it entered a new era.

"These were an amazing set of results," said Sasfin’s Alec Abraham. "The 15.5% increase in headline earnings per share was substantially above the consensus forecast of 10%."

Underpinned by continued strong growth in the rest of Africa and market share gains in SA, group turnover was up 14% to R71.3bn, trading profit was up 19.2% to R3.9bn and headline earnings per share up 15.5% to 460c. The dividend payment was increased in line with the rise in headline earnings per share to 180c a share.

Pieter Engelbrecht, who has been with Shoprite for 20 years and took over from Basson on January 1, highlighted the dramatic pace of the group’s growth by pointing out that financial 2017’s first-half turnover was in line with that recorded for all of financial 2011.

Abraham said he had been forecasting a full-year earnings increase of close to 6%, which would now have to be revised. "I underestimated the turnover increase, especially in the rest of Africa — where everyone else has been complaining about how poor the trading environment is," said Abraham.

While he had been looking for some margin improvement he had not expected it to be a full 20 basis points stronger.

Sales in existing supermarkets in SA were up 7.4% in line with the group’s internal inflation rate but were boosted to 10% by store openings.

Engelbrecht told analysts at a presentation on Tuesday that the biggest drivers of inflation were fruit and vegetables — because of the effects of the drought — and chicken, because of the brining legislation.

"Chicken prices shot up 30% after tougher legislation was implemented," he said.

Non-South African supermarkets, led by sterling performances from Angola, Nigeria, and Zambia, reported sales growth of 32%.

Furniture reported the weakest results. Although sales were boosted by a strong performance from Angola, profits were below expectations as new affordability regulations kicked in. "A lot of work is going into our furniture business," group chief financial officer Marius Bosman told analysts.
© BusinessLIVE MMXVII 

Related News

UK supermarkets join the nude-food revolution
16/10/2019 - 10:28
British supermarkets are starting to go “nude”.

Sainsbury's best performing of the big four but discounters still gaining ground
16/10/2019 - 09:17
Latest grocery market share figures from Kantar show total supermarket sales grew by 1.3% year-on-year over the 12 weeks to 6 October with Sainsbury’s continuing its recent run of better performance following investment in cutting prices and improving its offer.

CBD oil product launching countrywide in Clicks and Dis-Chem
15/10/2019 - 14:43
South Africa’s top health and beauty retailers, Clicks and Dis-Chem, are both rolling out the Elixinol range of CBD full-spectrum extract products in October.

Checkers launches long-awaited rewards programme
15/10/2019 - 12:20
The wait is over - Checkers Xtra Savings is here! Africa’s largest supermarket group has introduced its latest initiative that shows their loyalty to customers, and not the other way around.

Hyde Park Corner celebrates 50 fabulous years with customers
14/10/2019 - 15:20
Hyde Park Corner is celebrating its golden anniversary with '50 & Fabulous’ celebrations that include exciting events, lucky draws, prizes, special offers, opportunities to give back, milestone exhibits and a whole lot more in October and November.