EXPENSIVE DESPITE A PERFECT RECOVERY
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.