Shoprite (SHP) investor relations material

Executive summary

• Group sales grew 7.2% to R136.8 billion, with trading profit up 5.9% to R7.7 billion and EBITDA up 6.7% to R12.4 billion.

• Headline earnings per share increased 7.9% to 708.9 cents, and dividend per share rose 7.7% to 307 cents.

• Supermarkets RSA delivered 7.1% sales growth, outperforming the market by 2.3x, with record Black Friday and festive sales.

• Internal selling price inflation reached a 7-year low at 0.7%, enabling significant price relief and volume growth.

• Opened a net 273 stores over 12 months, creating 1,711 new jobs in six months.

Financial highlights

• Gross profit rose 7.1% to R32.6 billion, with a gross margin of 23.8%.

• Trading margin held at 5.7%; Supermarkets RSA trading margin at 6.2%.

• EBITDA grew 6.7%; net cash position improved to R15.1 billion.

• Return on invested capital improved to 19.5%; return on equity reached 27.8%.

• CapEx was R3.9 billion for H1, representing 2.9% of sales, focused on store expansion and digital infrastructure.

Outlook and guidance

• Plans to open 123 new Supermarkets RSA stores in H2, targeting 5.5%-6% space growth.

• Full-year trading margin guidance at 5.7%-5.9%, gross margin expected at 23.9%-24.2%.

• Sustained low single-digit selling price inflation expected for the remainder of the year.

• CapEx for the full year projected at R7.5 billion, below 3% of revenue.

• Effective tax rate estimated between 27%-28%.