Pick n Pay increase it’s turnover under Ekuseni strategic plan
In May 2022 Pick n Pay group launched Ekuseni strategic plan, which resulted to growth of medium-term sales and profit targets with dividend of 25.3%. Pick n Pay shared their full H1 FY23 interim results announcement. According to Pick n Pay, the Group delivered a positive performance in its first trading period under the Ekuseni strategic
Pick n Pay increase it’s turnover under Ekuseni strategic plan
In May 2022 Pick n Pay group launched Ekuseni strategic plan, which resulted to growth of medium-term sales and profit targets with dividend of 25.3%.
Pick n Pay shared their full H1 FY23 interim results announcement. According to Pick n Pay, the Group delivered a positive performance in its first trading period under the Ekuseni strategic plan. In addition to taking crucial steps to deliver the plan, the Group increased its turnover by 11.5% year-on-year. This strong turnover growth in part reflects the normalisation of the environment after the July 2021 civil unrest and Covid-19 liquor trading restrictions last year which negatively impacted the base. When excluding these disruptions in the base, we estimate normalised H1 FY23 turnover rose by an encouraging 8.2%.
While turnover normalised during this period, the Group continued to feel the after-effects of the civil unrest in terms of increased insurance and related security costs. Additional expense increases arose from broad inflationary pressures and from investment in implementing our Ekuseni strategic plan. Underlying gross profit margin reflects higher fuel costs, alongside price investment to support our customers. Despite this, the Group reported pro forma profit before tax of R588.0 million (+22.2% year-on-year), it said.
| KEY FINANCIAL INDICATORS | 26 WEEKS TO28 AUGUST 2022H1FY23 | 26 WEEKS TO29 AUGUST 2021H1 FY22 | %CHANGE |
| GROUP TURNOVER | R51.3 billion | R46.0 billion | 11.5% |
| GROSS PROFIT MARGIN | 9.4% | 18.2% | |
| TRADING EXPENSES | R9.8 billion | 10.6% | |
| PRO FORMA PROFIT BEFORE TAX1 | R588.0 million | R481.2 million | 22.2% |
| PRO FORMA PROFIT BEFORE TAX – SOUTH AFRICA1 | R456.1 million | R389.6 million | 17.1% |
| PROFIT AFTER TAX | R453.3 million | R296.8 million | 52.7% |
| BASIC EARNINGS PER SHARE (EPS) | 94.34 cents | 61.97 cents | 52.2% |
| HEADLINE EARNINGS PER SHARE (HEPS) | 97.73 cents | 61.28 cents | 59.5% |
| PRO FORMA HEPS1 | 88.76 cents | 70.85 cents | 25.3% |
| INTERIM DIVIDEND PER SHARE | 44.85 cents | 35.80 cents | 25.3% |
HIGHLIGHTS FROM THE PERIDO INCLUDE:
– The 17 May launch of the Ekuseni strategic plan with ambitious medium-term sales and profit growth targets
– Split of Pick n Pay supermarkets into two tailored banners: QualiSave, serving lower-to-middle-income customers, and Pick n Pay, serving middle-to-upper-income customers
– Launch of an accelerated store refurbishment programme to clearly differentiate the two banners and improve the customer experience
– Average weekly sales growth of 15% achieved for the 41 stores upgraded to the new CVPs
– Market leading SA sales growth of 27.2% from soft-discounter Boxer, with its sales performance disclosed separately for the first time
– Pick n Pay Clothing continued to gain market share with 14.8% sales growth
– Online sales growth of 82.0%, with future growth to be supported by the recent launch of Pick n Pay groceries on the Mr D app, South Africa’s leading online food delivery service
– Reaching agreement with our largest labour union, SACCAWU, to introduce multi-skilling, which allows Pick n Pay to schedule employees for different jobs within one day, thereby improving productivity and customer service
– R315 million Project Future savings, enabling Pick n Pay South Africa to restrict like-for-like cost growth to a similar level to its 4.5% like-for-like sales (and well below 6.0% Group like-for-like cost growth).
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