Woolworths Holdings Ltd., a South African food and clothing retailer, is considering opportunities in Nigeria, Mauritius and Angola, as it seeks to increase income from outside its home market.
“We are committed to Africa,” Chief Executive Officer, Ian Moir has said in a phone interview from Cape Town. “In 10 years’ time, Africa will become a much more important part of our business. It’s not a two-to-five-year game.”
Woolworths operates in about 12 African countries and in Australia through its Country Road unit. African nations other than South Africa, account for less than 5 per cent of the retailer’s revenue.
Woolworths said that net income rose to 775 million rand ($107 million) in the six months through Dec. 26, from 662 million rand a year earlier. Sales gained 9.4 per cent to 12.8 billion rand, the Cape Town-based retailer said in a stock exchange filing.
“It’s been a good six months for us,” said Moir, who took over as CEO from Simon Susman on Nov. 18. “We have got more people coming in, buying a bigger basket and spending more. They are feeling wealthier, their disposable income is by and large higher, interest rates are low, inflation is low.”
Woolworths rose 1.14 rand, or 4.6 per cent, to 25.74 rand in Johannesburg trading at 3:08 p.m., giving the company a market value of 21.8 billion rand. The shares have gained 30 per cent in the past 12 months.
The retailer reported an 11.8 per cent gain in food sales in the first half as it raised prices an average of 3 per cent. Sales of clothing and general merchandise rose 8.1 per cent, with prices gaining 1.4 percent.
“Inflation is going to rise, both in clothing and in food for a whole host of reasons,” including higher oil, wheat and cotton prices, Moir said. “Within our business we expect we will see a price rise of about 8 per cent going forward over the next 12 months.”