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Shoprite exits Nigeria after 15 years

Shoprite said in a trading update that it was pursuing the sale after reviewing its operating model and receiving approaches from various investors

Africa’s biggest grocery retailer, Shoprite, is leaving Nigeria after operating in the country for 15 years.

The South African-based retailer, which owns more than 2,800 outlets across Africa, said it has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.

Shoprite has been reviewing its long-term options in Africa as currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia have weighed on earnings.

“Following approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria, the board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited,” the company said in a statement.

The company said its Nigerian operations could be classed as discontinued when it reports its full-year results.

“Any further updates will be provided to the market at the appropriate time,” it said.

Shares shoot up

Shares in South Africa’s Shoprite Holdings shot up over 11% on Monday after it reported higher total sales.

With total sales rising 6.4% to about US$9.1 billion in the 52 weeks to 28 June, it said its full-year headline earnings per share (HEPS) could rise despite the impact of the coronavirus and an already announced impairment charge.

It said its HEPS – the main profit measure in South Africa – were likely to be between 1.6% below and 6.4% above the 747.7 cents it reported a year earlier.

The company’s supermarkets division in South Africa grew by 8.7% while sales at its supermarkets outside South Africa, excluding Nigeria, fell 1.4%.

Its South African supermarkets were boosted by a strong second-half performance.

The group plans to publish its 2020 year-end results on 8 September.

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Source
Reuters
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