Pick n Pay Stores Ltd. rose the most in three weeks in Johannesburg as second-half earnings rose and the South African supermarket chain said it plans to increase selling space.
The stock climbed as much as 2.6 percent, the biggest intraday gain since March 27, to 43.39 rand. The shares traded 2.4 percent up at 2:42 p.m., paring the fall to 7.1 percent this year and giving the company a market value of 20.8 billion rand ($2.6 billion).
Earnings excluding one-time items climbed 6.7 percent to 105.98 cents a share in the fiscal second half through February from a year earlier, following investment in a loyalty program and distribution system, the retailer said in a statement today.
“The second-half earnings show we’ve potentially seen a bottoming out as the benefits of its investment spending comes through,” Shamil Ismail, an analyst at Cadiz Securities, said by phone from Cape Town.
The retailer plans to open more than 100 stores in the next year, representing 3.5 percent growth in new space.
Pick n Pay has trailed in overall space growth and been “underweight in fast-growing smaller supermarkets,” Deputy Chief Executive Officer Richard van Rensburg said in a copy of a presentation in Cape Town today.
Shoprite Holdings Ltd. (SHP), Africa’s largest food retailer, said on Feb. 21 that profit climbed 20 percent to 1.4 billion rand in the six months through Dec. 11 from a year earlier.
The sale of Pick n Pay’s Franklins supermarket chain in Australia to Metcash Ltd. was completed on Sept. 30, earning the South African company 438.4 million rand after tax. Proceeds from the sale, which the company will reinvest in its South African operations, were accounted for in the half.
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