Pick n Pay posts rise in FY results on cost cuts

The retailer said headline earnings per share came in at 224.04 cents in the year to end February.

Pick n Pay Norwoord. Picure: Norwood Mall.co.za

JOHANNESBURG - South African grocer Pick n Pay posted a 26.4 percent rise in full-year profit on Tuesday, helped partly by cost cuts under a turnaround plan aimed at winning back market share.

Pick n Pay said headline earnings per share came in at 224.04 cents in the year to end February compared with 177.26 cents a year earlier.

Headline EPS, a measure that excludes certain one-off items, is the profit figure most widely used in South Africa.

Sales grew 8.2 percent, outpacing last year's growth of 6.1 percent and its strongest growth since 2010, the company said in a statement.

Sales growth was still slower than the pace of growth in bottom line, a sign that much of profit growth came from cost cuts.

Once a favourite of investors and customers, Pick n Pay has lost ground to rivals such as market leader Shoprite in the last few years after failing to invest in new stores and supply chains.

But the appointment of Richard Brasher as chief executive, the former UK head of Tesco who put in place a plan to cut costs, is widely expected to help the company better compete.

Shares in Pick n Pay have gained nearly 50 percent since Brasher took the helm in February 2013.

A final dividend of 125.20 cents per share was declared, bringing the year's total payout to 149.40 cents, which was 26.5 percent higher than the previous year.