2024-03-05 15:05:19 ET
Shoprite Holdings Ltd (SRHGF)
Q2 2024 Earnings Conference Call
March 05, 2024 02:30 AM ET
Company Participants
Pieter Engelbrecht - Chief Executive Officer
Anton de Bruyn - Chief Financial Officer
Conference Call Participants
Presentation
Pieter Engelbrecht
Good morning, everybody. Welcome to our Interim Results Presentation for 2024. I hope that we will be able to give you some insights in what had transpired in the last six months. We will use our normal format, where I will give a bit of an overview just for the group. Anton will then take us through the detailed financials, and then I'll just end off again with a bit of the strategy and how we see going forward in the next couple of months.
So, in terms of the operational overview, the first part of my presentation, I know I can spend an hour on all the excuses of why things are not great or why the performance could be better or what the reasons are what makes doing business in South Africa extremely challenging. But we're not going to do that. That is not what we do. Rather, we're going to just tell you that, we've been busy again, as usual. We have done a lot of development, additional employment.
We've launched some leadership programs. We had some fun in terms of advertising, some creative. We had the World Cup that was quite fun with the old Sixty60. And very happy also to say that we have managed to get 34 new innovation and retail awards in the last six months. But we never lose focus on the fact that we have responsibility to develop small and local suppliers and then keep the affordability in mind.
So the example here is a Meal for four for just ZAR 20. The little scooter that, we are proud to say, it's locally made, very happy with that. Continue to develop the Forage & Feast brand, very high levels of acceptance amongst our special Checkers customers. And we even try to put the Xtra joy back into Christmas when we decided to do something special for Stanford after that town suffered terrible flooding.
It's been a very busy year. Sales amounted to ZAR 121 billion. Now, one can very easily get carried away with big numbers and also percentages. What is noteworthy here is the fact that, there was ZAR 14.8 billion of additional sales added in the last six months. That is an enormous amount, I think, in any person's book.
Gross profit, you would have seen that last year, we had a slight reduction in our gross profit margin. I did explain at the time that, we took a decision not to pass the price increases as fast on to the consumer as they were passed on to us.
In other words, we absorb some of the inflation on behalf of the consumer that pretty much have now phased itself out and we're a bit more normalized scenario. Hence, the slight increase in the gross margin. Always great to be able to pay a dividend and even better, if there's an increase in the dividend. So, very pleased with the results this six months.
So contrary to common belief, our customer visits growth, it's not purely new stores or space growth. Customers are actually more loyal. They frequent our stores more often and they also spend more with us. This has resulted in an item volume growth of 5.1%, always very good. It's good for our suppliers. They need volume growth in order to stem the increases in costs. That has resulted in a ZAR 4 billion in share gains and is now marking 58 consecutive months of uninterrupted market share gains. We believe we continue to win with our customers, outpacing our competitors. One is our obsession about price, and price competitiveness. And very clearly, on the right-hand side, you can see that throughout the period, our own internal inflation was less than the official food inflation....
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Shoprite Holdings Ltd (SRHGF) Q2 2024 Earnings Call Transcript