Listed supermarket group Pick ‘n Pay is expected to report a 21% increase in its headline earnings per share for the year to the end of February this year, to 135 cents from 111,6 cents the previous year, when it announces its final results on Tuesday morning, according to a consensus of seven investment analysts surveyed by I-Net Bridge.
Pick ‘n Pay is also seen lifting its dividend for the year to 95,7 cents per share, compared with 80 cents in 2004.
The range of earnings forecasts is from a low of 133,3 cents to a high of 164,2 cents per share.
In its most recent trading statement, Pick ‘n Pay said it is anticipating a rise of between 18% and 22% in its headline earnings per share.
For South African supermarket groups such as Pick ‘n Pay, earnings over the past 12 months have benefited from stronger consumer buying thanks to higher disposable incomes and lower inflation, as well as lower interest rates.
However, food retailers have not benefited to the extent of retailers of durable and semi-durable goods (clothing, footwear, furniture, electronic goods and so forth) given that consumer demand for non-durables like food is not as elastic in this category.
Higher sales volumes are likely to make up for only muted price inflation (or deflation in some cases) in many food categories over the period, analysts believe, leading to the roughly 20% increase in headline earnings forecast for Pick ‘n Pay, off an already strong 2004 base.
The only black mark in the group’s performance is likely to stem from its Australian operations, which are seen as recording ongoing losses.
On Monday, Pick ‘n Pay was one of the few counters on the JSE Securities Exchange to record an increase, last quoted at R22,99 from R22,80 at Friday’s close, up 0,83%. This compares with a decline of 1,8% in the FTSE-JSE general retailers index at 4pm local time. — I-Net Bridge