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Pick n Pay profit tumbles

Oct 24 2012 08:27 Reuters

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Johannesburg - SA's second-largest grocer Pick n Pay Stores [JSE:PIK] reported a 34% fall in first-half profit on Wednesday, hit by cautious consumer spending and tougher competition.

Pick n Pay said headline earnings per share totalled 35.9 cents in the six months to end-August compared with 54.7 cents a year earlier.

Pick n Pay has missed out on a recent bull run by domestic rivals as it struggles to grow profits due to its late investment in its distribution centres and slower store openings.

Earlier this month, the company named former UK head of Tesco, Richard Brasher, as it new chief executive, a move that is expected to help turnaround and compete against domestic rivals and Walmart.

This month it also flagged that it expected a sharp drop in earnings.

Sales increased 6% to R28.3bn and the company cut its interim dividend by 34% to 14.75 cent.

Shares in the company have fallen more than 8% so far this year, underperforming a more than 34% surge in its closest rival Shoprite Holdings [JSE:SHP].

 
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