Shoprite Holdings Limited · JSE:SHP
Shoprite — Investor Presentation (February 2014)
9 slides from Shoprite's investor presentation, February 2014
Slide 1: Divisional Director
AubreyKarp DivisionalDirector 21
Slide 2: Furniture – Trading Environment
Furniture– TradingEnvironment • Toughtradingconditionscontinued • Householddisposableincomeremainsunderpressure • Durablesspendingimpacted • Productdeflationduetoeconomiesofscale,demand(TVs) andpricecompetitioncontinued • RanddepreciationhasliftedpricesfromJanuary2014 • Previousfurnitureandmicrolend
Slide 3: Furniture – Overview
Furniture– Overview • Salesgrowthremainedbuoyantat10.5% • Tradingprofitgrowthof10.9% • OKFurnitureandOKPowerExpress– expansion andgrowthcontinues • House&Home– startingtoperformbetter • Debtorsbook– nosignificantchange 23
Slide 4: Furniture – Trading Environment
Furniture– TradingEnvironment Sales R2.1bn+10.5% OKFurniture House&Home Increase 18.1% 3.6% LikeforLike 11.2% 2.9% Internalsellingpricedeflation1.65% SalesMix Dec2012 Dec2013 HomeandEntertainmentAppliances 63% 62% Furniture,Bedding,PatioandCarpeting 37% 38% Cash 69% 68% Credit 31% 32% 24
Slide 5: Furniture – Trading Environment
Furniture– TradingEnvironment NationalCreditRegulator’s– 3rd quarterreportfor2013 • Only51.9%ofthe20.3millionactivecreditcustomersareingoodstanding • 21%oftheseconsumersreflectadverselistingsatthevariousretailers (morethanthreemonthsinarrears) • 14%reflectadverselistingsatthecreditbureaus • 13.1%ref
Slide 6: Furniture continued
Furniturecontinued DebtorsBook Dec2012 Dec2013 DebtorsBook(Gross)+13.1% R1.4bn R1.6bn NewContracts+8.3% 137284 148704 • Averagerandcontractvalueincreasedby0.4% Arrears Dec2012 Dec2013 ActualArrears 7.4% 7.7% BalanceofContractArrears 20.1% 20.8% BadDebtsProvision 10.6% 10.7% • Highconsumerdebtlevelsc
Slide 7: Furniture continued
Furniturecontinued TradingProfit:R134m(10.9%increase) Sales 10.5% NetGrossIncome 13.2% TotalExpenses 13.6% ControllableExpenses 13.4% FixedCosts 14.8% • OKFurnitureprofitsincreasedby7.2% • House&Homeprofitsincreasedby40% • Exceptionalresultconsideringcurrentindustrytrends andpricedeflation 27
Slide 8: Furniture continued
Furniturecontinued StoreNumbers OpenedSince Total Confirmed June13 Dec13 June2014 OKFurniture 16 282 16 OKPowerExpress 2 21 2 House&Home 47 2 Total 18 350 20 • 4Storesclosed– 2OKFurnitureand2House&Home 28
Slide 9: Furniture – Outlook
Furniture– Outlook Lowgrowthenvironmentexpectedtocontinue • Ongoingpressureonconsumers’disposableincome • Highdebtexposure • Continuingelectricalproductpricecompetitiveness Futuregrowthdrivers: • Increasedstorefootprint(20newstoresconfirmedtoJune2014) • Deepdiscountingofhighvalueproductstodrivevolum
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