Shoprite Holdings Ltd. rose the most in almost eight years after Africa’s biggest food retailer said growth in full-year sales accelerated, led by gains at stores outside its home market of South Africa.
Shoprite surged as much as 9.3 percent to 191.47 rand a share in Johannesburg, the highest since January 2013 on a closing basis and the biggest gain since September 2008. The stock was 7.1 percent higher at 187.49 rand by 10:38 a.m., with 1.7 million shares traded, almost 100 percent of the three-month daily average.
Turnover for the 12 months, or 53 weeks, through June increased 14.4 percent to about 130 billion rand ($9.1 billion), the Cape Town-based company said in a statement late Tuesday. On a 52-week basis, which was more comparable to the previous period, turnover rose 11.6 percent, against an 11.2 percent gain a year earlier, while the increase in sales from supermarkets outside South Africa accelerated to 29 percent from 16 percent.
Gains elsewhere on the continent were achieved “despite the impact of lower commodity prices and the devaluation of certain currencies” relative to the rand, Shoprite said. South African supermarkets, which reported a sales increase of 10.9 percent, also managed an improved trading performance in the second half of the year, the company said.
South African retail success
Shoprite and Pick n Pay Stores Ltd. are among South African retailers succeeding in growing sales, despite headwinds including weak domestic consumer confidence, rising interest rates and a slump in the rand, which has declined 13 percent against the dollar over the past 12 months. The International Monetary Fund forecasts economic growth for South Africa this year of 0.1 percent, which would be the slowest pace since a 2009 recession.