Tue Aug 21 12:29:00 UTC 2001
During the year until 30 June 2001, Shoprite Holdings returned to its profit levels before acquiring OK Bazaars in 1997. The group has succeeded in increasing its operating profit margin from 1.8 % to 2.1 % under the extremely difficult trading conditions prevailing in its specific market segment during the time under review.
By attaining this target, the consolidation of OK Bazaars has not only been fully completed, but the larger group is now also poised for further growth, both locally and in the rest of Africa. The group has attained this goal thanks to a strong and experienced management team, which has shown that they can effectively handle a task of this scope within the time allowed.
During the year under review, Shoprite increased its turnover by 6.3 %, from R 18,431 billion to R 19,597 billion, despite the fact that consumer spending in the lower income groups has continued to shrink. Although the group’s number of customers have increased by 2.8 %, the basket size per customer increased by only 2.3 %. In addition, Shoprite has reduced its sales area within South Africa by 18 000 m².
An operating profit of R 414,8 million was achieved, which represents an increase of 27.3 % on the R 325,8 million for 2000. When evaluating the operating profit It must be kept in mind that Shoprite is still being adversely affected by certain rental contracts that were part of the OK Bazaars transaction and in terms of which almost R7 7 million were included in the results, representing costs for space that cannot be used or rented out. The majority of these contracts are set to expire between 2004 and 2007.
The profit before extraordinary items was R 315,4 million, as against R 247,5 million the previous year. Earnings per share amounted to 58c (2000 : 45,5 c) and the directors declared a final dividend of 11c per share, bringing the total distribution for the year to 20,5 c (2000 : 18 c).