Pick ‘n Pay Stores, one of Africa’s largest food and general merchandise retailers, is expected to post a 20% rise in its fully diluted headline earnings per share (HEPS) for the year to the end of February 2004 when it releases its final results on Tuesday April 20.
At the same time, dividends for the year are forecast to rise by 17,8%, according to an I-Net Bridge survey of seven investment bank analysts.
The I-Net Bridge consensus for Pick ‘n Pay shows the group’s 2004 fully diluted HEPS coming in at 118,5 cents per share, a 20,7% increase on the 98,2 cents recorded in 2003. Forecasts ranged from 114,5 cents to 120,5 cents per share.
Pick ‘n Pay’s total dividend per share for 2004 is predicted to rise to 81,3 cents from 69 cents a year earlier. The range of forecasts is from 78 cents to 87,2 cents.
For the six months to the end of August 2003, the food retailer reported an 18% rise in HEPS and a 10,9% rise in turnover, with the results dented by the extortion incident in which the company was warned that several products at various Pick ‘n Pay stores had been poisoned. The person or persons responsible were never found.
The effects of that incident, which weighed on turnover and took up much valuable management time, will not be repeated in the second half of the financial year. Rather, the group’s turnover — particularly for its semi-durable and durable items — is likely to have received a boost from continuing strong consumer spending, which has been underpinned by the delayed impact of a total of 5,5% in interest rate cuts during the second half of 2003.
The result is also likely to be further improved by reduced losses at Franklins, Pick ‘n Pay’s Australian operation that has been progressively turning around its business.
Towards the end of the financial year the company sold its Boardmans homeware retail chain to Edgars Consolidated Stores for R94-million in cash, but the loss of turnover associated with the disposal is relatively small compared with the entire Pick ‘n Pay group, and will not be reflected until the 2005 financial year.
For the 2004 financial year, the group had plans to open a total of 95 new stores across all formats, giving it 637 stores in all. — I-Net Bridge