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Pick n Pay flags up to 20% rise in FY profit

Cost measures and productivity boost earnings.

JOHANNESBURG – South African retailer Pick n Pay Stores said on Monday it expects full-year profit to increase between 15 to 20%, buoyed by disciplined cost measures and higher productivity in stores.

Headline earnings per share (HEPS) for the 52 weeks ended February 2017 will be between 257.65 and 268.85 cents per share compared to 224.04 cents per share in 2016.

“Greater operating efficiency is evident in the strong discipline on cost, more centralised supply chain and higher productivity in stores,” the company said in a statement.

Pick n Pay, which also trades in Namibia, Zimbabwe and Zambia, said turnover growth of 7% reflects a difficult trading environment, alongside some internal disruption from refurbishments and store closures.

Sluggish economic growth, depressed consumer confidence and heightened competition is weighing on retailers in South Africa.

Pick n Pay has lost ground in South Africa to rivals such as market leader Shoprite, after failing to invest in new stores. But Richard Brasher, a former UK head of Tesco who took over as Pick n Pay CEO in 2013, is implementing a plan to win back market share.

The firm is expected to release its full-year results on April 19. 

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