THE expansion of Africa’s largest retailer, Shoprite, into the continent is paying off as it said yesterday it expected earnings to improve at least 35% in the six months to December.

Shoprite said earnings per share and headline earnings per share for the six months to end-December were expected to be 35%-45% higher than for the previous period.

However, the company said the growth in earnings should not be extrapolated over the full year as “the current state of the economy should be considered when projecting the results of the group for the full year”.

Syd Vianello, a retail analyst with Nedcor Securities, said he expected to see earnings improve 37% and the first half would be slightly better than expected. He said half-year earnings would probably come in at 180c a share. Nedcor had been expecting 175c. Last year, earnings per share were 133c.

Vianello was targeting 400c for full-year headline earnings. Last year, earnings per share were 309,5c. Vianello said he expected the second half of the year to improve by 32%.

He said Shoprite had benefited substantially from inflation and a buoyant economy in Africa, where about 12% of its revenue for the last year was earned.

Shoprite operates in 17 countries across Africa, the Indian Ocean islands and southern Asia and expects to start operating in the Democratic Republic of Congo, and open more stores in Angola and Ghana. It ha s identified 16 sites in Nigeria for new stores.

Vianello said it was logical that the second half of the year would show less growth than the first as food inflation came off. Shoprite had also benefited from Pick n Pay’s failure to take advantage of the growing bottom end of the market, he said.

Last month, Shoprite said turnover had grown 27,3% to R29,6bn for the six months to December as its African business forged ahead.

Shoprite’s supermarket operation in SA increased sales 24,5% and 20% on a like-for-like basis while its non-local business continued to perform ahead of budget, growing rand turnover 54% and, on a like-for-like basis, 50,3%.

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