Stores refurbishment disrupts Pick n Pay’s revenue growth
PICK n Pay blamed its revenue growth of seven percent to R79 billion on “disruption to trade” due to refurbishing 62 stores and closing 12 underperformers during the 52 weeks to February 26.
After tax profit grew a more impressive 17 percent to R1.2bn, and the grocery chain declared a final dividend of 146.4c, taking the total for the year to 176.3c, an 18 percent increase on the previous year’s 149.4c.
Pick n Pay managed to grow profit faster than sales despite restricting its selling price inflation to 6.1 percent for the year, well below published food inflation of 11 percent, CEO Richard Brasher said in the results statement released on Wednesday morning.
Franchise fee income grew 10.5 percent to R349.8m, reflecting the 70 new franchise stores opened during its financial year. These included 32 Pick n Pay Express stores on BP forecourts. There were now 111 Pick n Pay Express stores, more than double the number of two years ago, Brasher said.
The group opened 68 new Pick n Pay company-owned stores and 25 new Boxer stores across all formats over the year, including 14 Pick n Pay local convenience stores. New stores contributed 3.6 percent to turnover growth. The group added 24 clothing stores and 46 liquor stores in its 2017 financial year. “The Pick n Pay clothing business again delivered strong double-digit growth, as customers sought longlasting quality at great value. The group’s liquor business grew 15 percent, with solid market share growth across a number of key lines,” the company said. Pick n Pay opened 12 new supermarkets outside SA during the year, three in Namibia, six in Zambia, one in Zimbabwe and two in Botswana. The group plans to open its first stores in Ghana and Nigeria over the next two years. “The group’s core South African operations delivered growth in profit before tax and capital items of 20 percent, with tough trading conditions in Zambia constraining growth in the rest of Africa division,” the company said. Pick n Pay’s loyalty programme grew to seven-million active members. Brasher said this translated to 20 swipes at tills every second. Its Smart Shopper programme had been altered to offer weekly personalised discounts tailored specifically to each customer on the basis of their actual shopping habits, the company said. — BusinessDay.