The group said that its core trading divisions were severely impacted by load shedding in H2, especially during the festive period.

By the end of September 2022, only 37% of its core business had backup power (58% when including acquisitions)

“As a value retailer, the group had been conservative in its backup power investment, as the historical
implementation of load shedding was manageable until September 2022, after which date it escalated to unprecedented levels,” the group said.

“The cumulative quantum of load shedding from September 2022 to March 2023 was greater than the previous 15 years combined, resulting in an estimated annual loss of 318,000 trading hours, equivalent to approximately R1 billion in revenue.”

In addition, the indirect impact of load shedding also hampered customer shopping behaviour due to decreased consumer confidence and the need to reduce higher levels of unsold stock.

The group said that its energy continuity roll-out plans and R220 million investment into backup power will result in 100% store coverage by the end of June 2023.

It added that this has led to an average 5% sales growth differential in stores when comparing pre- and post-backup power systems.

It said that the majority of the backup power systems are inverters, which can handle stage 8 load shedding while keeping the lighting level in stores at 70%, with the systems scalable should load shedding intensify.

In addition, the group’s head office and main distribution centre are fully operational during power cuts.

Despite the effects of load shedding, the group’s revenue still grew 17% to R32.9 billion, when including the 70% acquisition of the Studio 88 Group in October 2022.

However, the effects of load shedding during the festive period only saw the groups’ annual EBITDA increase by only 5.4% to R7.2 billion.

In addition, headline earnings per share dropped by 6.0% to 1,205.7 cents per share.

The group declared a final dividend of 447.1 cents per share, maintaining its 63% payout ratio. The group said that the dividend was declared from income reserves.

The group’s key financials are as follows:

  • Revenue – R32.9 billion (+17%)
  • EBITDA – R7.2 billion (+5.4%)
  • Operating profit – R4.9 billion (+0.5%)
  • Headline earnings per share – 1,205.7c (-6.0%)
  • Final dividend per share – 447.1c


Despite Consumer Price Inflation dropping from 6.8% in April to 6.3% in May, the group said that further interest rate hikes post-year-end have not meaningfully reduced inflation, which has resulted in consumers shifting their spending to a larger share of non-discretionary items.

The group added that elevated inventory levels are resulting in a highly promotional environment, with the challenging trading environment expected to continue through the first 6 months of FY2024.

That being said, the group predicts improvement in September 2023, with power outages at their base, inventory levels at their desired levels, and inflation and interest rates starting to abate.

Although the intensity of load shedding in Winter has been far less severe than expected, the group said that possible higher stages of load shedding in winter could still threaten the retail cycle.

“Despite a challenging environment, we are a resilient, motivated team and can still see many opportunities within our existing businesses and in the market. In the last two financial years, we have invested approximately R5.5bn in acquisitions, R1.7bn in capex and paid R4bn in dividends. This was funded wholly with cash, and we have ended this year with an unencumbered balance sheet,” CEO Mark Blair said.