Shoprite Holdings Ltd (SRHGF) H1 2025 Earnings Call Transcript

2025-03-04 18:16:03 ET

Shoprite Holdings Ltd (SRHGF)

H1 2025 Earnings Conference Call

March 4 2025 2:30 AM ET

Company Participants

Pieter Engelbrecht - Chief Executive Officer

Anton de Bruyn - Chief Financial Officer

Conference Call Participants

Presentation

Pieter Engelbrecht

Good morning and a very warm welcome to you all at our Interim Results Presentation for 2025. I'm going to just give a few highlights. Then Anton is going to explain some detail, pay special attention to what he's going to explain. There are a few changes in the current year number that will make comparability difficult but if you pay attention, you will understand and it will clear it for you. And then I'll give it some color towards the end again.

Firstly, I just want to say this was a fantastic six months and I would be really amiss if I don't extend my thank you and my greatest gratitude to the people of Shoprite that worked extremely hard to achieve this kind of results. The group sales are up 9.6% to R128 billion. Now I say in any man's language, that's a lot of money. That's a big number. We are happy to say that we didn't just buy market share. It didn't come with giving margin away. We actually managed to also increase the gross profit margin by 30 bps.

Trading profit up 13.5% more than sales or gross profit, which is quite commendable. And it's been a while since we've been able to have the trading profit line outperform the revenue line. EBITDA is up 16.7% up to R11.7 billion. That all resulted in headline earnings, especially a growth of 9.9%, just under the 10.

So, operationally, if we look at the business, the sales growth, RSA Supermarkets was actually very strong. It was double digits, very good volume momentum, growth in customers and in volume, that's where the total result come from, at a time when the internal food inflation came down to 1.9%. And you will recall the previous time I said that I expect that if the inflation comes down that we will see some volume growth. And volume growth is so important for our suppliers to keep the costs down.

So very pleased that we could grow volume almost 6%. The result of this growth and performance for the six months meant that we gained market share of R4.7 billion. It's now for over five years in a row uninterrupted that the group has gained market share. We've improved our on-shelf availability. We believe that is, part of the success is that we run over 98% on-shelf availability, which means customers get what they want when they're there looking for the product that they want. Similarly, it also supports the digital where you cannot not be in stock.

The group opened 283 new stores in the past 12 months, 55 new supermarkets. A commendable item to mention is the fact that in the last six months, the entire point of sale system of the group was changed. RSA rollout is complete. It is the fastest rollout of a point of sale system of that nature globally. And we've got many international retailers actually confirming with us, if it's true that it was done in such a short period of time. It was all done at night. Over 60,000 hours of work and training went into getting that job done and I once again, really indebted to the people of Shoprite to achieve such a feat.

We talk a lot about the Smarter Shoprite and the investments that we make in improving our operational efficiency. We will continue to do that. Most of the CapEx that we spend goes into new stores and revamps, and then on technology and enhancing our platforms. If one think, we had a very positive uptake with our partnership with Discovery Vitality, and we actually got the record market share gains in fresh, I say there's no holy grail around this cold chain supply chain in South Africa.

The Shoprite cold chain and supply chain is as good as anybody's. We had to expand in our supply chain. We had no choice, fortunately, we did. And it came just in time because of the massive volume uptake we saw from Black Friday right through this festive season. We've rolled out a new online platform. We had to re-platform it and added general merchandise. So now you can, with your food delivery, you can also order or get some general merchandise in one delivery, also within a one-hour slot. ...

Read the full article on Seeking Alpha

For further details see: