* To open 47 stores outside South Africa
* Sees scope for further 174 stores in 36-48 months
* FY headline EPS up 11 pct
(Adds analyst comment, expansion plans)
By Tiisetso Motsoeneng
JOHANNESBURG, Aug 20 Shoprite, Africa's
biggest grocer, is ramping up its expansion across the continent
with 47 new supermarkets as its core South African consumer base
grapples with high personal debt levels and growing fuel and
Nearly half of South Africans failed to pay back their debts
for three straight months this year, prompting banks to tighten
their lending criteria, while a weaker rand currency
fuelled inflation and higher petrol prices.
"It's tough out there," Shoprite deputy managing director
Carel Goosen said at the presentation of the company's full-year
Cape Town-based Shoprite, which reported an 11 percent rise
in full-year profit that fell slightly short of market
expectations, said it could double its stores outside of South
Africa in the next four years.
Shoprite has 153 supermarkets in 16 countries outside South
Africa. Those foreign outlets registered a 28 percent jump in
sales in the 12 months to the end of June, nearly three times
the rate of growth in its home market during the same period.
The bulk of the new stores would be in oil-rich Nigeria and
Angola. The company sees scope for 44 new outlets in Nigeria and
21 in Angola in the next three to four years, Chief Executive
Whitey Basson said.
After more than two years as an investor favourite, South
African retailers are fast falling out favour due to concern
that high personal debt levels and reluctance among banks to
lend more will squeeze spending in Africa's biggest economy.
South African retail sales grew by a smaller-than-expected
1.9 percent in June, data from the government statistics office
showed last week.
Shares in Shoprite, which are down about 20 percent this
year, gained 3.3 percent to 166.73 rand in what analysts said
was a recovery from oversold levels and optimism that its Africa
focus would help it ride a slowdown in consumer spending.
"In Shoprite, you have a company that's still growing
profits and paying dividends even in a tough environment and the
results were not that far away from the consensus," said Reuben
Bleeders, an analyst at Cape Town-based Gryphon Asset
The stock is trading close to its intrinsic value, according
to Thomson Reuters StarMine valuation model, which takes into
account the company's most likely earnings trajectory over the
next five years.
Shoprite posted an 11 percent rise in headline earnings per
share to 675.4 cents in the year to the end of June, a touch
below the 681 cents forecast in a Reuters poll of 11 analysts.
Headline EPS, South Africa's primary profit gauge, excludes
certain one-time items.
Sales rose 12 percent to 92.7 billion rand ($9.11 billion)
and the company lifted its annual dividend by the same amount to
338 cents per share.
(Reporting by Tiisetso Motsoeneng; editing by David Dolan and