Pick n Pay Stores reported a rise in full-year profit that beat analyst estimates as the South African supermarket chain opened more stores, reduced debt and cut costs from its distribution network.
Earnings per share excluding one-time items gained 28 per cent to 177.26 cents in the year through February, the Cape Town-based company said in a statement on Tuesday. The median estimate of 13 analysts surveyed by Bloomberg was for adjusted earnings per share of 1.71 rand. Sales rose 6.2 per cent to 67.6 billion rand ($5.6 billion).
“The first stage of our recovery plan -- which set out to stabilize the business -- is now largely complete,” chief executive officer Richard Brasher said in a separate statement. “We have strengthened our financial control, tightened our efficiency and introduced effective management disciplines.”
South African shopping chains have been battling to sustain growth as unemployment of about 25 percent and slowing economic growth constrain household incomes. Shoprite, South Africa’s biggest grocer, said in February that rolling blackouts are its biggest concern for coming months as shoppers stay away and companies are compelled to pay for backup power.
Pick n Pay added 113 new stores during the period and raised the full-year dividend by 28 per cent to 1.18 rand. The stock has declined 2.1 per cent this year, valuing the company at 25.1 billion rand.
Bloomberg News, edited by ESM
