3 September 2024
Reviewed results for the 52 weeks ended 30 June 2024 and cash dividend declaration
Core South African supermarkets segment adds R21.4 billion in sales for 2024
- Group revenue increased by 12.0% to R246.1 billion
- Group sale of merchandise increased by 12.0% to R240.7 billion
- Core business, Supermarkets RSA, sale of merchandise increased by 12.3% to R195.0 billion
- Group trading profit increased by 12.4% to R13.4 billion
- Diluted headline earnings per share (DHEPS) increased by 7.4% to 1 245.2 cents (2023: 1 159.4 cents)
- Adjusted diluted headline earnings per share increased by 10.3% to 1 273.2 cents (2023: 1 154.4 cents)
- Excluding the impact of hyperinflation*, Group sale of merchandise increased by 12.0% to R240.8 billion and DHEPS increased by 6.0% to 1 238.7 cents
- Full year dividend per share increased by 7.4% to 712 cents (2023: 663 cents)
- Inclusive of a net new 73 OK Franchise stores, the Group opened a net of 292 stores and created 6 490 new jobs
* Excluding the impact of hyperinflation on Group sale of merchandise and DHEPS constitutes pro forma financial information in terms of the JSE Limited Listings Requirements, is the responsibility of the Board of Directors of Shoprite Holdings, has been prepared for illustrative purposes only and may not fairly present the Group’s financial position, changes in equity, results of operations or cash flows. For a full appreciation of the pro forma financial information please refer to pages 10 to 15.
Pieter Engelbrecht, Chief Executive Officer:
It is my privilege to present results that aptly reflect a year in which we remained focused on our business and what we stand for – being best-priced, in-stock, solution-driven and customer-led. Our 12.0% increase in Group sales equates to our core South African supermarkets customers spending R21.4 billion more with us this year. During a time when customers are incredibly pressured, this is the greatest reward for our efforts which come as a result of best-in-class execution, innovation and an unwavering dedication to serve. Growth of this nature, in a highly competitive market and from a high base can only be achieved as a result of across-the-board commitment. With this in mind, my sincere thanks are extended to Team Shoprite for their continued dedication to our customer base which numbers more than 30 million across South Africa, not including the nine other African countries throughout which we operate our food retail operations.
Checkers and Checkers Hyper’s 12.3% sales growth reflects its customer focus, value positioning, culture of continuous improvement and commitment to serve. A busy year evidenced by 26 new stores and 12 store upgrades. Ongoing advances in fresh and private label development, together with market leading execution from Checkers Sixty60 all reflect the brand’s commitment to its 12 million Xtra Savings rewards customers.
Shoprite and Usave meet the needs of the Group’s core customer base in the price sensitive market. Collectively this year, not including our Shoprite and Checkers LiquorShop business which increased sales by 20.0%, Shoprite and Usave increased sales from a base of R90.0 billion last year by 10.7%. This equates to an additional spend of R9.6 billion in stores this year. Individually Shoprite, our price-fighting, full-range supermarket increased sales from a substantial rand value by 10.3% and Usave, our limited assortment discount supermarket increased sales by 13.2%.
Our core customer base remains front and centre in our business, keeping us on point to deliver the lowest prices and maintain our in-stock positions. As a result of our brand segmentation strategy, Shoprite and Usave meet the needs of their customers in different ways, however their shared operational structure facilitates best in-class execution to meet the high-volume demands required at differing peak times for each.
Shoprite Group's affordability focus wins with customers.
Usave, our perennial achiever, in particular, is to be commended. Despite experiencing the lowest sell inflation of all our grocery businesses (2.3% selling price inflation at its lowest in May 2024) and its customer being the most stretched, Usave increased sales ahead of our other top performing grocery businesses which in themselves all grew ahead of the market (per NielsenIQ, measuring rest of market growth for the year at 6.7%). Whilst Usave reports from a substantially lower rand value base than Shoprite, its growth, from an established store base in a highly competitive market is testament to the role it plays in the communities it serves and validates both its positioning as well as our core supermarkets business segmented approach.
The Group generated R23.6 billion in cash from operations during the year. Our approach to capital allocation afforded us a year of continued investment as we directed R7.8 billion towards our Smarter Shoprite strategy in the form of new stores, store upgrades, continued store maintenance, digital and e-commerce, information technology, sustainability and supply chain. R5.8 billion capital spend was allocated to expanding the business, the remaining R2.0 billion was attributed to maintaining Group operations. Our new point of sale system implementation is progressing well, testament to the depth of experience and expertise in the business as well as the collaboration of teams involved. Notwithstanding this investment in support of our future plans, in accordance with our policy, we are pleased to increase our dividend by 7.4% this year, returning R3.9 billion in dividends to our shareholders, keeping our investor returns ahead of inflation.
In terms of the way forward, we have embarked on two structural changes to the business, both occurring subsequent to our June year-end close. Firstly, we have signed an agreement to dispose of the furniture business including the OK Furniture and House & Home brands, excluding Angola and Mozambique operations to Pepkor Holdings Ltd (“Pepkor”). Secondly, with regards to our vision to be Africa’s most profitable omnichannel retailer, the Group is in advanced discussions to purchase the remaining 50% shareholding in our last-mile logistics provider, Pingo Delivery (Pty) Ltd, and will update in due course.
With respect to our furniture business, we found ourselves at a crossroad with the business’s future growth and profitability hamstrung by the requirement of a level of investment that would have resulted in us re-directing capital and project management resources away from that currently dedicated to our food retail operations. We believe the best outcome for OK Furniture and House & Home is for the business to operate in an environment where its required infrastructure and credit management expertise exists, thus allowing us to focus our resources on what we do best.
I am enormously grateful to our incredible employees whose commitment continues to put our customers front and centre in our business. In addition to our investment in our business, our dividends to shareholders and distributions to our staff, we returned R16.9 billion to our 31 million Xtra Savings customers this year. Looking ahead, our focus on price and value will remain our top priority for our customers whose loyalty we appreciate and value above all else.