Pick n Pay reported a 91% increase in half-year earnings on Wednesday and identified 3 billion rand ($207.5 million) in additional cost savings till 2025 as part of its turnaround strategy.
The South African grocery retailer said its results were driven by solid performances by its value-boxer grocery chain and clothing business, strong momentum in its online business, and successful management of working capital and capital investments.
The comparable headline earnings per share (HEPS) rose from a low base of 37.12 cents a year earlier to 70.85 cents in the 26 weeks to Aug. 29. In Zimbabwe, comparable HEPS exclude hyperinflation accounting.
Pick n Pay declared an interim dividend of 35.80 cents per share, up 91% in its financial results for the six months ended 29 August 2021.
The retailer’s second-quarter performance was adversely affected by civil unrest in South Africa in which stores were looted. The return of government restrictions on alcohol sales during the third wave of the pandemic affected sales as well.
The group, which operates 2,039 outlets across Southern Africa and Nigeria, estimated that disruptions caused a loss of 1.7 billion rand ($117.31 million) from sales during that period.
Pieter Boone, the Pick n Pay Chief Executive Officer, told investors that additional cost savings would be generated, among other things, through improved supply chain efficiencies and the continued restructuring of support offices.
In an effort to expand its market share among the less-affluent segment, the Boxer chain will open a second distribution center.
Several new product lines are being added to Pick n Pay’s select stores, centered around fresh produce, plant-based meals, and convenience products, in order to compete with Shoprite’s Checkers chain.
It said 16 additional stores will be added to the program.