Pick n Pay Profit Rises as Costs Cut and Supermarkets Addedby
South African retailer adds 83 Pick n Pay, Boxer stores
Trading conditions in company's markets `remain tough'
Pick n Pay Stores Ltd. said first-half profit climbed 23 percent as the South African supermarket chain added outlets and cut costs even as consumer confidence in its home market remains depressed.
Profit increased to 322.5 million rand ($24 million) in the six months through Aug. 30, compared with 261.9 million rand a year earlier, the Cape Town-based company said in a statement on Tuesday. Sales rose 8.5 percent and it opened 83 Pick n Pay and Boxer stores in the period. The company raised the interim dividend 24 percent to 0.24 rand a share.
“Trading conditions remain tough in South Africa and other markets, with strong retail competition for customers who are coming under increasing financial pressure at all levels of society,” Pick n Pay said. The company “has remained focused on improving its operational efficiency,” it said.
South African retailers are battling with consumer confidence that remains muted as shoppers hold back on spending even as fuel prices have fallen. Unemployment of 25 percent and almost daily power cuts earlier this year also weighed on households.
The shares gained as much as 5 percent, the most since April 21, and traded 2.7 percent higher at 9:42 a.m. at 9:42 a.m. in Johannesburg. The stock fell 8.2 percent, the most in almost 14 years, on Oct. 2 when the company warned that business conditions remain difficult and first-half earnings missed estimates.