The Shoprite share price touched an all-time high of R263 in early trade on Monday before easing back to close at R256.99 just as the group announced interim results and a 14.2% hike in diluted headline earnings per share to 525.2c. An interim dividend of 205c a share was declared, up 13.9% on the previous interim period.

A strong showing from the South African supermarkets underpinned the 6.3% increase in turnover to R75.8bn in the six months to December 31 2017. On a like-for-like basis turnover was up 2% and follows a hefty 14% increase in the corresponding 26 weeks of its 2017 financial year. South African supermarkets reported increased turnover of 7.8%, equivalent to 3.5% on a like-for-like basis.

CEO Pieter Engelbrecht said the South African performance was boosted by the continued success of the increased focus on Checkers’ high-end customers. The group increased its market share in SA by 0.44 percentage points.

However turnover of the non-RSA supermarkets declined 0.4% from the prior year’s hefty 32.3% increase. On a like-for-like basis this represented a decline of 6.4%.

Engelbrecht said this was a reversal of the previous year and that it “validates the strength of our strategy which not only includes geographical diversification but also the extraction of value across all operations and brands.”

He said the results demonstrated the group’s resilience to economic headwinds. "SA has been in an almost no-growth situation for most of 2017, unemployment stood at 26.7% in the fourth quarter of 2017, consumer confidence was at low levels and our customer base has been under unprecedented financial pressure." The group experienced deflation in most product ranges.

The furniture division grew sales by 10.7% despite credit sales dropping by almost one third to only 15% of total sales.

Group trading profit was up 5% to R4.1bn underpinned by a trading margin of 5.41% down marginally from 5.48% in the previous interim period.

Engelbrecht said the group continued to face extremely testing trading conditions “with positive economic improvements across our operations still some way off and food inflation expected to remain low”. He did acknowledge there were tentative signs of renewed confidence in SA and some green shoots in several economies in which the group operated, “which point to positive change in the medium-term”. (Business Day SA)