Pick n Pay profits up as costs cut

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IOL image picknpay store entrance retail INDEPENDENT MEDIA Customers at Pick n Pay in Carlton centre in Johannesburg. Photo: Leon Nicholas.

Johannesburg - Pick n Pay Stores, South Africa’s second-biggest grocer, said full-year earnings gained as much as 45 percent after the company reduced costs through job cuts and and the revamping of its supply chain.

Adjusted earnings per share on a pro forma basis increased 35 to 45 percent in the 12 months ended March 2, while revenue advanced 7.7 percent, the Cape Town-based company said in a statement.

Sales growth in the previous fiscal year was 7.1 percent.

“Much work remains to be done in what is a difficult trading environment,” said the company, which hired former Tesco director Richard Brasher as chief executive officer last year.

“Our strategic focus remains that of customer-driven and sales-led growth, with progress on efficiency and expense control.”

South African retailers have been struggling as high unemployment and a rise in interest rates has hurt disposable incomes. Shoprite, Africa’s largest grocer, said in February cost-of-living increases were hitting customers hard in the continent’s biggest economy.

Pick n Pay shares reversed losses of 2.4 percent, trading 0.6 percent higher at 51.25 rand at the close in Johannesburg.

The stock has declined 1.4 percent this year, compared with a 4.5 percent increase on the FTSE/JSE Africa All Shares Index. - Bloomberg News

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