Pick n Pay reports a rise in FY profit, ups dividend

Supported by a recovery in liquor sales and the growth of Pick n Pay Clothing.
Image: Supplied

JSE-listed retailer Pick n Pay has reported a 14.5% rise in headline line earnings per share (Heps) to 262.59 cents for the 52 weeks ended February 2022, a rise supported by the sales performance of its clothing and liquor business.

Group turnover for the period came in 5.2% higher than the previous comparable period, to R97.9 billion, up from the R93.1 billion reported in prior period. The improvement in turnover for the group comes despite it having to stomach an estimated R 2.7 billion in lost sales as a result of the impact of the July civil unrest and the Covid-19-related liquor bans.

The retailer declared a full year dividend of 221.15 cents per share, 23% higher than that of the prior period.

Read: How Checkers Sixty60 dominates the on-demand grocery market

Sales performance

Despite the fluctuation in sales performance during the period, the retailer saw its sales for the fourth quarter of 2022 rise by 7.4%, indicating a recovery from the July riots. This growth has continued to gain momentum as during the first eight weeks of the 2023 full year period sales grew to 9.9%.

Contributing to the group’s sales performance during the year was Pick n Pay Clothing, which reported a 21% increase in sales for the period, reflecting market share gains. The clothing division also saw a 233% rise in online sales year on year.

The group’s liquor business is also seeing a recovery, this as the retailer reports a 57.2 rise in liquor sales for the period, despite losing 66 liquor trading days during the period and around R0.9 billion in sales.

The group’s discount format Boxer maintains its position of driving strong growth for the group. As such, Pick n Pay has noted intentions to expand the brand’s footprint, announcing plans to open 200 new Boxer stores over the next three years.

“I was pleased with our performance in a highly disrupted year, and the extraordinary recovery we made after the civil unrest,” CEO Pieter Boone says in a statement.

“Our sales in the fourth quarter of the last financial year, and first quarter of this financial year, demonstrate our potential. In Boxer we have the fastest growing discounter in Africa. We have also delivered strong growth in Clothing and in Online.”

Price pressures

With inflation on the rise, the retailer says it has managed to protect its customers from feeling the price pinch by containing its selling price inflation for the year, this is despite food inflation being on the rise.

“Cost discipline and operational efficiency enabled the group to offer lower prices and deeper promotions, with selling price inflation restricted to 2.9% against CPI Food of 6.2%,” the retailer says.

“Gross profit at 18.8% reflected material stock write-offs as a result of investment in lower prices for customers, and the civil unrest.”

Read: Pick n Pay ups fresh produce offering with first in-store vertical farms

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