Shoprite Holdings Limited · JSE:SHP
Shoprite — H1 2007 Earnings Presentation
13 slides from Shoprite's earnings presentation, February 2007
Slide 1: Shoprite Holdings Ltd
31 Aubrey Karp HOLDINGS LTD
Slide 2: Furniture: Key highlights (26 weeks)
32 Furniture • Key highlights (26 weeks) – Sales increased 14.23% to R1.180bn – Trading profit increased 14.83% to R123.7m – Trading profit margin increased 0.05% – 8 new stores opened – House and Home website launched (Purchase on-line in both Chains) – Quality of debtors book remains high
Slide 3: Furniture: Trading environment
33 Furniture • Trading environment – Slowdown in the lower income groupings continued in the first three months of the financial year, but improved dramatically from October 2006 – Consumer confidence remains positive – Movement into higher LSM’s continues – Product price deflation continued in the
Slide 4: Furniture: Trading environment continued
34 Furniture • Trading environment continued – Financial Institutions continue to advance substantial amounts of credit, thus limiting opportunities for retail credit growth
Slide 5: Furniture: Store expansion
35 Furniture • Store expansion – Opened 8 stores – OK Furniture : 6 stores – House & Home : 2 stores Store numbers – Total 206 – OK Furniture : 165 – OK Power Express : 12 – House & Home : 29 – First new format Furniture only House and Home – To open in April 2007 – Target – 215 stores by June 2007
Slide 6: Furniture: Revenue growths
36 Furniture • Revenue growths 2006 2005 Increased by 14.23% 1 180 431 1 033 350 • OK Furniture increased by 9.57% (strike) • House and Home increased by 20.38% • Sales growths since 2000 - 34.80%, 10.29%, 92.70%, 18.75%, 24.54%, 18.24% and 13.75%
Slide 7: Furniture: Turnover segmentation
37 Furniture • Turnover segmentation 2006 2005 Merchandise sales 88% 87% Insurance Premiums 6% 7% earned Finance income 6% 6%
Slide 8: Furniture: Inflation and sales mix
38 Furniture • Inflation (July 2006 to December 2006) – Plugs : -2.5% to + 1% – Furniture : -2% to -0% • Sales mix 2006 2005 Home entertainment & 64% 64% appliances Furniture, bedding, patio & 36% 36% carpeting
Slide 9: Furniture: Merchandise sales
39 Furniture • Merchandise sales 2006 2005 Cash 66.62% 63.96% Credit 33.38% 36.04% # of new contracts (1.28% decline) 183 006 185 373
Slide 10: Furniture: Trading Profits
40 Furniture • Trading Profits 2006 2005 Increased by 14.83% 123 719 107 739 • After enduring difficult trading conditions in the OK Furniture Chain in the first three months of the current financial year; and • With a prolonged strike.
Slide 11: Furniture: Debtors Book Balance and Arrears
41 Furniture Debtors Book Balance and 2006 2005 % Variance Arrears Debtors Book Balance R 1.06 R 1.01 - Increase R53.51 million billion billion Actual Arrears 3.07% 3.19% 0,12 Balance Of Contract Arrears 12.58% 13.43% 0.15 Bad Debt and UFC Provisions 19.57% 18.83% 0.74
Slide 12: Furniture: Prospects & Growth Continued
42 Furniture • Prospects & Growth Continued • Strategy remains focused on: – Store expansion – Volume growths and discounted pricing – Continual updating and introduction of new product ranges – Staff training and development programmes – Providing better service to customers • Effects of the Nation
Slide 13: Furniture: Prospects & Growth
43 Furniture • Prospects & Growth – Movements into higher LSM’s expected to continue – Expect some level of inflation, due to increased raw material costs and weaker exchange rate – Trading buoyancy should continue to May 2007 and Store openings will provide opportunity for further growth – Retailer