Shoprite sales update, Famous Brands interims on JSE diary
South African consumers will be in focus on Monday, with interim results from Wimpy, Steers and Debonairs Pizza owner Famous Brands, a September-quarter sales update from Shoprite, and September’s credit and money supply figures from the Reserve Bank.
Famous Brands warned shareholders on October 15 it expected to report a basic loss per share of up to R6.23 following a decision to impair UK subsidiary Gourmet Burger Kitchen by a further R874m.
Headline earnings per share (HEPS), which exclude the impairment, will increase by up to 14%.
Famous Brands said its restaurants outside the UK increased operating profit, but Gourmet Burger Kitchen’s operating loss tripled to £2.6m.
Road construction group Raubex said on September 12 it expected to report its interim earnings fell by up to 80%.
“Lower spend from the South African National Roads Agency Limited (Sanral) and delayed contract awards from provincial government during the period have had a negative impact on Raubex subsidiaries, both in the road construction operations and in the road rehabilitation and maintenance operations,” the trading update said.
Raubex’s results are likely to include retrenchment costs as the group scales itself down to “reduce capacity in line with the current low level of demand being experienced”.
The Reserve Bank is scheduled to release September’s money supply and private sector credit extension figures at 8am.
Investec Bank economist Lara Hodes said in her weekly note on Friday that she expected growth in private sector credit extension to have slowed to about 6.4% in September from a year earlier, after growth of 6.7% in August.
Corporate borrowing rose more than expected in August.
“We are not anticipating such a steep lift in corporate borrowing for September, amid a backdrop of weak economic growth and persistently depressed business confidence levels,” Hodes said.
“Furthermore we expect credit extended to households to remain relatively muted at around 4.9%, underpinned by elevated unemployment levels, lacklustre sentiment and a highly constrained consumer.”
Asian markets provided mixed signals to the JSE on Monday morning as they reacted to Brazil’s election, which right-wing populist Jair Bolsonaro won with 55.5% of the vote, and German Chancellor Angela Merkel’s defeat in regional elections in Hesse.
Japanese stocks were up slightly while Chinese stocks slipped, with Tencent down 0.54% to HK$258.60 ahead of the JSE’s opening.
The rand was trading at R14.61/$, R16.65/€ and R18.75/£ at 6.55am.
Source: businesslive.co.za
