TRADING WARNING
Investors shave R15bn off Shoprite after dire report
Shares slump to biggest one-day drop since 1999
Investors shaved R15bn off the value of Shoprite on Wednesday after Africa’s biggest retailer by market capitalisation issued a dire trading warning the previous day. The shares slumped as much as 16.6% and closed 14% weaker at R153.13, valuing the company at R90.5bn. It was its biggest one-day drop since 1999, after it said its troubles in the rest of Africa would combine with food-price deflation in its own market to push headline earnings per share down as much as 36%. Wednesday’s decline pushed the stock’s drop over the past year to 36%, compared with an 11% decline on the FTSE/JSE Africa Food & Drug Retailers index. The all share index dropped 9.1% in the same period. Like peers such as Woolworths, which largely caters for wealthier customers, Shoprite has been knocked by a weak economy that slipped into a recession in 2018. Consumers saw their buying power being squeezed by a combination of higher taxes and fuel prices that rose to record highs.
"Profitability has been a...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.