Johannesburg, September 2, 2008 - South African retailer Shoprite reported a 54.1 percent rise in diluted full-year headline EPS on Tuesday, but said it expects higher operating costs to impact on its profitability.
It said diluted headline earnings per share (EPS) for the year to end June were 298.6 cents, in line with its own forecast of a 44-55 percent rise. Total turnover rose 22.3 percent to 47.652 billion rand ($6.18 billion).
Shoprite said strong growth in its core supermarket business and operations outside South Africa had helped boost profit for the period, but said current levels were not sustainable in the new financial year and it expected turnover growth to slow.
Rival shopping chains Woolworths and Truworths have also forecast a tough year ahead as borrowing costs curb spending and inflate bad debts.
Consumer spending in South Africa has been under pressure as the central bank has raised the repo rate by 500 basis points since June 2006 to arrest surging inflation.
Full-year results from Woolworths, Truworths and retailer Massmart, suggested a consumer rebound in Africa's biggest economy was still way off, despite a central bank decision to keep rates on hold last month.
South African retail sales, once an engine of growth, have dropped for the past four surveyed months, while investors have also dumped retail stocks. The retail index has slid almost 14 percent so far this year.
Headline EPS is the key profit measure for South African companies which excludes non-trading, capital and certain extraordinary items.