Pick n Pay full-year HEPS drop as COVID-19 hurts sales
Pick n Pay's headline earnings per share dropped 21.4 per cent year-on-year for the 12 months ended February. Earnings were impacted by trading restrictions, which resulted in an about R4 billion in lost sales, and R200 million in additional costs related to Covid-19. Pick n Pay has also welcomed a new CEO. Joining CNBC Africa to review those numbers and the growth strategy is Lerena Olivier, CFO at Pick n Pay.
Wed, 21 Apr 2021 19:02:39 GMT
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AI Generated Summary
- Pick n Pay reports a 21.4 per cent drop in headline earnings per share for the 12 months ended February, citing trading restrictions and COVID-19 related costs as key factors.
- The company successfully adjusts to consumer needs, focusing on safe and productive store operations, leading to a 10 percent growth in full food and groceries for the year.
- Pick n Pay remains optimistic about capturing growth opportunities in 2022, emphasizing the importance of the right pricing and value proposition for consumers amid market competitiveness.
South African retailer Pick n Pay has released its financial statements for the 12 months ended February, showing a 21.4 per cent drop in headline earnings per share. The company attributes this decline to the impact of trading restrictions resulting in approximately R4 billion in lost sales, as well as an additional R200 million in costs related to the COVID-19 pandemic. The year has been characterized by unique challenges due to the ongoing pandemic, with the first half reflecting the effects of lockdown levels 4 and 5, followed by a significant rebound in the second half as the company adjusted to consumer needs and focused on ensuring safe and productive store operations. Lerena Olivier, CFO at Pick n Pay, highlighted the success in full food and groceries, with a 10 percent growth for the full year, driven by a commitment to providing customers with the products they need. Despite uncertainties around the future impact of the pandemic, Pick n Pay remains optimistic about capturing growth opportunities in 2022. The company acknowledges the support provided by the government's COVID-19 social relief grants to consumers in need, though the end of the scheme may pose challenges for future earnings forecasts. Pick n Pay emphasizes the importance of offering the right price point and value proposition to consumers to maintain market competitiveness. Market analysts have noted strong market share growth among competitors; however, Pick n Pay believes it has made significant gains, particularly in the value end segment, with successful divisions in liquor and clothing. The company plans to continue opening new stores, creating job opportunities as part of its commitment to employment growth in South Africa. In the face of currency weakness and supply chain disruptions affecting its rest of Africa operations, Pick n Pay is exploring local sourcing and distribution options to mitigate challenges and ensure product availability. The company's new CEO, Peter Buerner, has officially started his role, bringing a wealth of retail experience and a focus on growth strategies for both South Africa and the broader African market. Buerner's leadership signals a commitment to expanding Pick n Pay's presence and overcoming challenges to drive future growth.