Pick and Pay eyes further expansion for Boxer stores
Pick and Pay was not the grocer of choice on the stock market today with the share price tumbling over 13 per cent after it reported a drop in annual profits, mainly due to challenges in Zimbabwe and Zambia. The retailer also said it would defer its annual dividend to preserve cash due to the complexities of Covid19. Pick n Pay CEO, Richard Brasher joins CNBC Africa for more.
Tue, 12 May 2020 16:01:07 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Pick n Pay faced a decline in annual profits leading to a share price drop, attributed to challenges in Zimbabwe and Zambia as well as the decision to defer the dividend.
- CEO Richard Brasher defended the dividend deferral as a prudent move in light of the uncertain economic climate influenced by COVID-19, promising a reassessment during the mid-year results in October.
- Despite difficulties in Zimbabwe and Zambia, Pick n Pay remains committed to the African market, with plans for further investment and growth, particularly in the successful Boxer stores segment.
Pick n Pay, a retail giant, faced a tumultuous day on the stock market with its share price plummeting over 13 per cent. The decline was attributed to a drop in annual profits, primarily due to challenges in Zimbabwe and Zambia. The CEO, Richard Brasher, addressed these issues and more in an interview with CNBC Africa. Brasher highlighted that the company reported a solid underlying profit before tax (PBT) growth of 15% in South Africa despite the economic recession and prevailing headwinds. While many had high expectations, Brasher believes the results were commendable given the circumstances, although some investors may have been disappointed by the decision to defer the annual dividend. Brasher defended this move as a prudent decision amidst the current uncertain economic climate influenced by the COVID-19 pandemic. He assured stakeholders that the dividend deferral is a temporary measure to preserve cash, and the company will revisit the decision during the mid-year results assessment in October.
Brasher also discussed the challenges faced in Zimbabwe and Zambia, emphasizing that Pick n Pay's teams in these countries are navigating tough operating conditions admirably. Both countries have been grappling with economic difficulties, including hyperinflation and currency devaluation. Despite the hardships, Brasher remains optimistic about the long-term prospects in Africa and reiterated the company's commitment to the continent.
Looking ahead, Brasher shed light on the performance of Boxer stores, noting that they have been resilient amid market pressures. The limited range discount stores have proven to be successful, attracting customers with their clean, well-stocked, and value-driven approach. Brasher expressed confidence in the future expansion of the Boxer brand, highlighting plans to allocate significant capital towards its growth. With a focus on serving customers uniquely, Pick n Pay aims to capitalize on the market segment served by Boxer stores, positioning the brand for further success in the retail landscape.