Pick n Pay sees lower profit, shares fall

South Africa’s second-largest food retailer Pick n Pay expects half-year profit to decline by as much as 25%, against tough competition and losses related to the sale of its Australian unit.

Pick n Pay said headline earnings per share for six months to end-August are likely to drop between 10 and 25 percent.

Headline EPS totalled 85.88 cents in the same period a year earlier. Headline EPS, which excludes certain one-time items, is the main measure of profit in South Africa.

Pick n Pay said in July it would sell its underperforming Australian supermarket business, Franklines, for A$215-million, although the finalisation of the deal has been pushed back until November.

After excluding results from discontinued operations, such as Franklins, Pick n Pay said it expects first-half profit to fall by as much as 15%.

South African retailers have been under pressure in recent years as consumers battle unemployment and high debt levels, forcing them to cut back on spending.

The Cape Town-based company could also face increased competition from wholesale retailer Massmart, a takeover target for the world’s retail giant Wal-Mart.

Shares of Pick n Pay fell 1.8% to R42.70, underperforming a 0.5% rise in Johannesburg’s blue-chip Top-40 index.—Reuters



blog comments powered by Disqus

Client Media Releases

Infrastructure, awareness key to curbing road fatalities
Rosebank College open for 2018 applications
Cyber Resilience Framework saves
MTN distances itself from parody Twitter account