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Johannesburg - Pick n Pay [JSE:PIK] headed for its biggest gain in a year in Johannesburg trading after fiscal-2015 earnings per share rose as much as 50%.
Pick n Pay climbed as much as 6.1% to R53.94 and was trading up 4.58% at R53.16 as of 12:29, the steepest jump since April 22, 2014, based on closing prices.
According to the company's trading statement on SENS, the result is one step closer to the retailer's recovery plan of reducing debt and interest charges, and beginning the task of driving greater efficiency through all the operations.
The improvements have strengthened underlying margins and positioned the Group for the next phase of its recovery plan, which is to change the trajectory of performance for the long-term.
The stock has gained 1.3% this year, compared with a 1.7% increase at Shoprite [JSE:SHP] and Woolworths' [JSE:WHL] 17% surge.
Earnings per share for the 52 weeks through March 1 rose to as much as 183.02 cents, Pick n Pay said on Friday in a filing of preliminary numbers. The retailer will publish detailed financial figures on April 21.
Pick n Pay said it expected full-year earnings to increase by as much as 30%, supported mainly by cost cuts.
South African shopping chains struggled last year as unemployment of about 25%, prolonged strikes and high levels of personal debt contributed to a contraction in household incomes.
Shoprite said in February that rolling blackouts are its biggest concern for coming months as shoppers stay away and companies are compelled to pay for backup power.
Pick n Pay in 2013 hired chief executive Officer Richard Brasher, a former director at Tesco, to lead a turnaround after costs spiraled and market share fell.
Pick n Pay has been increasing the distribution of stock from a depot near its Cape Town headquarters and said in October that it planned to set up more than 80 new outlets in the second half, accelerating its store-opening programme.
