Pick n Pay has published its interim financial results for the six months ending 1 September 2019.
Despite a difficult trading environment, the group said that trading profit in its core South African business was up 16.4%, with trading profit margin up from 2.5% to 2.8% of turnover.
Headline earnings per share grew 17.5% to 91.28 cents, with diluted HEPS up 18.8%.
On a comparable basis, excluding hyperinflation gains in Zimbabwe, headline earnings per share were up 9.5%, and diluted headline earnings per share were up 10.7%.
Comparable profit before tax (PBT) was up 9.7%, with the PBT margin improving from 1.2% to 1.3%
The group said that 63 net new stores were added, with an investment of R758 million spent on instore expansions, refurbishments, supply chain capability and infrastructure.
Group chief executive (CEO) Richard Brasher said that he was pleased with another strong results – despite tough trading conditions inside and outside South Africa.
“In this environment, retailers have found it difficult to balance their two key objectives: delivering solid sales growth while maintaining profit margins,” he said.
“I am very pleased that we have succeeded in growing both our sales and our profits. This is a significant achievement – given in particular the negative impact of foreign exchange volatility affecting our associate TM Supermarkets in Zimbabwe.”
Pick n Pay said that it will continue to focus on its value-added services strategy to allow customers to ‘do more in-store’.
Income from these services grew 16.1% year-on-year, with growth across all categories in Pick n Pay and Boxer, including banking, money transfers and a growing travel and event ticketing offer.
To this end, the group has launched a portfolio of insurance products in partnership with Hollard.
Pick n Pay said that this offer is currently available in 25 of its stores and has shown ‘encouraging results’ to date.
The offer will be expanded and rolled out to more stores over the next 18 months, it said.
The retailer said that it has also seen success from its exclusive partnership with TymeBank, which now has 850,000 customers.