BUSINESS OF RETAIL

PICK N PAY PREDICTS PROFITS JUMP

SOUTH African retailer Pick n Pay said yesterday that it expected its half-year diluted headline earnings per share to increase by up to 85 percent, largely due to cost savings from staff lay-offs made last year. The company’s shares rose more than 3 percent after it flagged that its diluted headline earnings per share for the end of August would come in between 95.43 and 100.88 cents per share, compared with a restated 54.53c per share in 2017. Headline earnings – South Africa’s most widely watched profit gauge – strip out certain one-off items. Normalised headline earnings per share, which exclude the earnings impact of the R200 million spent on once-off severance payments in the prior period, are seen increasing up to 20 percent to 102.69c per share. The retailer cut approximately 3 500 jobs, or 10 percent of its workforce, in July last year in what it said were cost-saving efforts in response to difficult trading conditions. Pick n Pay flagged turnover growth at 6.4 percent, despite constrained consumer spending. – Reuters