EX­PEN­SIVE DE­SPITE A PER­FECT RE­COV­ERY

Finweek English Edition - - SIMON SAYS -

Pi ck n Pay re s u l t s s how t he turn­around is work­ing, but still has a long way to go. Trad­ing profit mar­gin was 1.9%, up from 1.6%, and still far too low. This re­ally needs to dou­ble, but at least the trend is in the right di­rec­tion. Same-store growth was up 3.6%; that is be­hind its in­ter­nal food inf la­tion at 6.3% in the sec­ond half. This fate has be­fallen pretty much all re­tail­ers. How­ever, Pick n Pay needs to start grow­ing mar­ket share, and the ex­cuse can be that the re­tailer is f irst mak­ing f i xes and that growth will fol­low, but on a his­toric P/ E of over 30 times, the stock con­tin­ues to price in a per­fect re­cov­ery and I still think it’s ex­pen­sive.

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