Steinhoff Africa Retail (STAR) reported a 12% rise in half-year profit on Tuesday thanks to strong growth in its Ackermans brand and a turnaround in retailer JD Group, but said it was slowing its expansion in Africa.
A competitive retail environment would inhibit growth for the rest of the financial year, it said.
STAR is financially independent of its crisis-hit parent, South African retail group Steinhoff which runs chains such as Britain's Poundland, Mattress Firm in the United States and Conforama in France and has been fighting for survival after it discovered accounting irregularities in December.
H1 Results
STAR reported headline earnings per share - the main profit measure used in South Africa that strips out one-off items - of 52.6 cents for the six months ended 31 March, up from 46.9 cents a year earlier.
Operating profit rose by 9% to 3.3 billion rand ($262 million), supported by growth in Ackermans and JD Group despite a challenging retail environment, STAR said in a statement.
Shares in STAR, however, fell 3.9% as it said it would not declare an interim dividend and revised down its targeted 350 net store openings for the 2018 financial year to 330 as it slows its expansion in Africa.
Its Pep Africa unit "reported a disappointing performance for the period under review as low commodity prices impacted consumer spending in its traditional markets, while volatile exchange rates and a stronger rand affected the business."
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
