Shoprite finalises plan on the sale of its equity stake
Shoprite Group has confirmed that it has concluded plans on the terms and conditions concerning the sale for the disposal of a 100% equity stake in its Retail Supermarkets Nigeria Ltd subsidiary. The transaction has been lodged with the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) for approval.
With this, the management expects the transaction to be approved by the end of the 2021 financial year. The ongoing franchise agreement for the Shoprite brand to continue to exist in Nigeria as well as an administration and services agreement to provide support to the new shareholders is about to be concluded by the management.
Shoprite Group has also disclosed that in its unaudited results for the 26 weeks to 27 December 2020 the sale of merchandise increased by 4.7% to R83.4 billion while its trading profit increased by 18.3% to R4.7 billion.
Pieter Engelbrecht, Chief Executive Officer, while commenting on the sale increase said: “We are proud to report the Group’s sales increasing by 4.7% for the six months. Within that, our core Supermarkets RSA segment, representing 78.0% of Group sales, increased sales by 5.6%. Adjusting for the closure of our RSA LiquorShop business as a result of nationwide COVID-19 lockdown regulations, our Supermarkets RSA business grew sales by 7.8%.”
Shoprite Group also disclosed that in its unaudited results for the 26 weeks to 27 December 2020, the sale of merchandise increased by 4.7% to R83.4 billion while its trading profit increased by 18.3% to R4.7 billion.
“This is an incredible result given that our customer base spans the entire South African food retail spectrum. Our South African supermarkets’ internal selling price inflation of 4.3% for the six months reflects our unwavering commitment to our customers on price. In true Shoprite style, it was a collective effort across our Shoprite, Usave, Checkers and Checkers Hyper banners and the team is to be commended.
“The Supermarkets RSA business has achieved 22 months of uninterrupted market share gains and in the six months to 27 December 2020, the Group created a total of 4 305 new jobs,” the group said.
It continued: “In significantly more adverse conditions, our Supermarkets Non-RSA continuing operations achieved constant currency sales growth of 0.9%. The business remained vigilant, combating the challenges faced across Africa. However, currency devaluations again eroded much of our efforts.
“We closed the last of our Kenyan stores in February 2021 and are at the approval stage in terms of the sale of our Nigeria supermarket operation. From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.
“The successful launch of our Xtra Savings Rewards Programme in our South African based Shoprite supermarket chain following the success in Checkers, gave rise to another strategic milestone for the Group. Our Checkers and Shoprite Xtra Savings Rewards Programme now has the largest membership base in South Africa, with 17 million rewards members.”
It added: “The opportunities that this programme affords the Group and its valued customers are significant and to say we are optimistic with regard to the future for our business, as a result, would be an understatement.
“It is noteworthy that the Group increased trading profit by 18.3%, whilst making significant strides in other areas: borrowings declined by R5.9 billion to R5.5 billion, inventories reduced by R3.0 billion and we lived well within our means in terms of capital expenditure of R1.6 billion.
The group concluded: “None of this was achieved in isolation. It was due to the collective effort of the more than 140 000 employees across the Group, represented in areas not limited to our aforementioned supermarket operations, which came together daily to serve our customers and sustain the growth of this great company.
“It remained a difficult period in the context of COVID-19 which continued to weigh on our customers, our people and our operations and my acknowledgement and sincere thanks go out to all.”
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