Pick n Pay income up despite tough times

FOOD retailer Pick n Pay yesterday released full-year results that show earnings growth to be lagging its peers, recording a slight increase in profitability for the year ended February.

The group expects the tough conditions to continue after a notably tough second half of the 2010 financial year. Food inflation tumbled during the period under review.

Chief executive Nick Badminton said reductions were passed on to the consumer.

Higher volumes have not yet come through the system, but the group has marginally increased market share (including discontinued operations).

Headline earnings a share edged up 1,1percent from a year ago to 236,33c with total dividend a share up 2,6percent at 174,50c for Pick n Pay stores. Turnover increased 9,8percent to R54,7billion, while the trading profit margin dropped to 3percent as a result of reduced gross profit margins.

Fresh and private label sales grew in double-digit figures. Material improvement came in earnings from Score conversions and a greater percentage of inland groceries being distributed centrally.

Expansion into Africa is under way with 17 stores in Namibia, Botswana, Swaziland and Lesotho. The first corporate store will open in Zambia midyear, franchise partners have been signed in Mozambique and sites identified for expansion in Mauritius.