(Updates with closing share price in last paragraph.)
Feb. 21 (Bloomberg) -- Shoprite Holdings Ltd., Africa’s largest food retailer, said sales are increasing this year after profit grew 20 percent in the fiscal first half on new stores and “particularly good” spending over the December holidays.
Net income advanced to 1.4 billion rand ($183 million), or 2.80 rand a share, in the six months ended Dec. 31, from 1.2 billion rand, or 2.34 rand a share, a year earlier, the Cape Town-based company said today in a stock-exchange statement. Sales rose 13 percent to 41 billion rand.
Shoprite benefited from “the size of its store footprint and the efficiency of its infrastructure,” Chief Executive Officer Whitey Basson said in a presentation in Johannesburg. Shoprite will show sales growth in January and February, the CEO said.
In the second half of the fiscal year, the company “expects to maintain satisfactory growth in turnover and profitability as the benefits of an expanded infrastructure become more apparent,” Basson said.
Shoprite sales may also increase because of rising food prices, the CEO said. Inflation was unchanged at 6.1 percent in December, the statistics office said on Jan. 18.
The retailer opened 59 stores in the first half, and another 174 will be added by June 2013, it said. Shoprite, which has 123 supermarkets in 15 countries outside of South Africa, sees African new store development gathering pace.
The company opened 10 new stores in African countries outside of South Africa in the six months through December and plans to open another 12 before June, including its first store in the Democratic Republic of Congo, Basson said.
“I wouldn’t trade Shoprite for any big group in Europe right now because we are close to the better opportunities in Africa,” Basson said. Besides the planned openings, Shoprite is “investigating a number of new store locations,” he said.
Shoprite had an exchange-rate gain of 27.7 million rand, compared with a loss of 13.4 million rand a year earlier, as the rand weakened against the U.S. dollar and other African currencies. The rand fell 18 percent against the dollar last year, the most of 16 major currencies tracked by Bloomberg.
The shares rose 1.4 percent to 134.50 rand at the close in Johannesburg, giving the company a market value of 73 billion rand. The stock has gained 39 percent in 12 months.
--Editors: Marthe Fourcade, David Risser
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