Pick n Pay today, 16 October 2018, published its financial results for the six months ended 26 August 2018.
Headline earnings per share grew 80.5%, with diluted HEPS up 80.4%. Normalised headline earnings per share and normalised diluted headline earnings per share, removing the impact of voluntary severance costs in the prior year, are up 17.0% year-on-year.
Turnover grew 6.4%, and 3.8% like-for-like. In an increasingly tough economy, the company delivered turnover growth of 6.7% in South Africa, and 4.2% like-for-like.
The company benefited from decisive action taken last year to reduce operating costs, increase productivity, and invest more in the customer. Momentum was evident in the first six months, with the company delivering lower prices and better value for customers.
Pick n Pay held inflation at 0.3% against CPI Food of 3.5%. The company reduced prices across 2,500 every day grocery lines, and delivered a new “Fresh Promise” on its fresh meat and produce offer, which delivered double digit growth in key fresh categories over the period.
“I am delighted with the six-month result. This has taken a great deal of hard work from everyone in the Pick n Pay and Boxer team,” comments Richard Brasher, Pick n Pay CEO.
“We’ve acted boldly and taken tough decisions. We’re leaner, fitter and buying better. We’ve improved our cash flow and reduced our long-term gearing to almost zero, both indicators of a strong performance in a tough economy.”
“We have invested heavily in our customers, just when they need it most. We’ve reduced prices of key grocery lines, delivered a more compelling fresh meat and produce offer, and given our customers simpler and more personalised promotions.
“We are growing and improving our estate, including in formats and services supplementary to our core supermarket offer. Our online and value-added services are performing particularly well.”
“Boxer has once again reported an outstanding performance with double digit customer growth. They’re delivering exceptional deals on basic lines, and giving customers confidence that they do not need to shop around for the best value.”
A tough economy is a good test for a solid retailer. Pick n Pay has improved its offer, localised our product offerings and found traction with customers across all sections of the economy. This has been achieved without any sacrifice in earnings or profit margin.
While working hard, we’ve remained true to our values, investing in schools, communities and environmental initiatives. This is on top of the benefits that a successful Pick n Pay brings through more jobs, more suppliers and more partners. I am very proud of the culture of this business, which is why South Africans recognise Pick n Pay as their most trusted retailer.
We are in good shape. We have demonstrated an improved ability to compete effectively in a low growth environment and we look forward to building on this momentum in the second half of the year.”
Rest of Africa
The Group’s Rest of Africa operations contributed ZR2.3 billion of segmental revenue this year, up 0.4%. Without the impact of currency weakness, segmental revenue was up 3.9% in constant currency terms, with like-for-like growth of 0.6%. Profit before tax was up 7.3% to R136.1 million, driven by an outstanding performance from the Group’s associate in Zimbabwe, TM Supermarkets, which recorded turnover growth in local currency of 30.4%. In Zambia, strong cost control and tight working capital management mitigated the impact of difficult trading conditions.