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SOUTH Africa’s second biggest grocery firm, Pick n Pay Stores Ltd, said first-half earnings will increase as much as 35 percent as the company cut back on costs and improved sales. Earnings per share excluding one-time items were 51.01 cents ($0.05) to 55.09 cents for the 26 weeks ended August 31, compared with 40.81 cents a year earlier, the Cape Town-based retailer said yesterday in a statement.
Profit gained after “improved financial control” amid a downturn in consumer confidence, the company said.
South African retailers have struggled this year as rising inflation and unemployment of more than 25 percent have constrained spending.
Retail sales rose 2.4 percent in July, from a revised decline of 0.9 percent the previous month — the worst performance since a 2009 recession.
Pick n Pay last year hired chief executive officer Richard Brasher, a former director at Tesco Plc, to lead a turnaround of the company after costs spiralled and market share fell.
Revenue “growth of 6.8 percent over the period reflects the increasing financial pressure faced by our customers and the competitiveness of our market,” Pick n Pay said.
Sames-store sales growth was four percent, compared with 2.7 percent in the same period last year.
The shares increased 3.2 percent to 56.25 rand as of 10:04AM in Johannesburg yesterday, the biggest intraday jump since May 8. The stock has gained 8.2 percent this year, compared with a 14 percent fall at Shoprite Holdings Ltd., Africa’s biggest food retailer. — Bloomberg.
Online Reporter