Johannesburg - Pick n Pay Stores, South Africa’s second-biggest grocer, said full-year profit gained as it streamlined the supply chain to reduce costs and added 85 more stores.
Net income increased 6 percent to 583.7 million rand in the 12 months through March 2, the Cape Town-based company said in a statement today.
Sales rose 6.5 percent to 63.1 billion rand, while the retailer raised its dividend by 10 percent to 92.3 cents per share.
Pick n Pay is working to regain customers from competitors including Shoprite, Africa’s largest grocer, and has been trying to cut costs and improve its supply chain amid a downturn in consumer confidence.
South African retail sales growth probably slowed to 3.8 percent in February, compared with 6.8 percent the previous month, according to the median estimate of 14 economists surveyed by Bloomberg.
“Market share losses haven’t been stemmed, even as the collapsing of buying and support structures have helped rein in costs,” Alec Abraham, an analyst at Sasfin Securities in Johannesburg, said by phone.
“Upmarket, convenience shopping in South Africa is growing, but Pick n Pay may have come to that too late.”
Pick n Pay shares gained as much as 0.9 percent to 53.39 rand in Johannesburg, the highest on an intraday basis since December 31.
The stock is up 2.2 percent in the year to date, in line with a similar gain at Shoprite.
Pick n Pay has cut “operating expenses as a percentage of turnover despite rapidly rising fuel, utility, property and other costs,” chief executive Richard Brasher said in an e-mailed statement.
“We have a clear plan to improve the shopping trip for our customers.” Brasher, a former director at Tesco, was hired last year.
The company’s like-for-like sales in Africa outside its home market climbed 9.4 percent.
Pick n Pay closed its Mauritius and Mozambique franchise operations, saw “good growth” in Zambia and has set up a team to “explore opportunities” in Nigeria. - Bloomberg News