South African retailer Shoprite, which scrapped plans to merge with Steinhoff International on Monday, reported a 15.5 percent jump in half-year profit, buoyed by sharp sales growth in Angola and Nigeria.
Shoprite, which sells mostly groceries, has grown rapidly outside its home market with sales in other African countries now accounting for more than a fifth of the retailer’s total.
A merger with Steinhoff International would have created an African retail giant but the plan was called off after minority shareholders complained that the proposed deal would offer little value for Shoprite. Some analysts said there were no obvious synergies between the two businesses.
Shoprite reported diluted headline earnings per share of 460 cents for the six months to end-December, in line with forecasts and compared with 398.2 cents a year earlier.
Sales in Angola surged 155 percent from a year ago, while Nigerian revenue jumped 60 percent.
Both are important growth markets for the retailer, but experienced a shortage of foreign exchange as oil revenues remained under pressure, affecting economic growth.
However, Shoprite said it was able to fund its stock requirements from its external balance sheet and kept shelves stocked while many traders in the region struggled.
“It was exceptional growth and we must be cautious because to continue at 150 percent is unlikely,” Chief Executive Pieter Engelbrecht, who took the reins from stalwart Whitey Basson in January, said in an investor presentation.
Whitey is credited with transforming the company from an eight-store chain into the biggest food retailer in Africa in his 37 years at the helm.
In South Africa, still the largest of the retailer’s 15 African markets, sales grew 14 percent to 71.3 billion rand ($5.5 billion), while sales outside its home market advanced 32.2 percent to 12.9 billion rand.
