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Johannesburg - Pick n Pay [JSE:PIK] flagged a more than one-third jump in half-year profit on Monday, as cost cuts helped it offset sluggish sales growth.
Once a darling of investors and customers, Pick n Pay is in the middle of a turnaround plan that includes slashing costs while still opening new stores after losing ground to peers such Shoprite Holdings [JSE:SHP].
The Cape Town-based company said diluted headline earnings per share likely increased between 25% and 35% in the six months ended August.
But top-line growth was at least two times slower than profit, a sign that much of that increase in the bottom line came from cuts which included scaling back dividends, reducing staff and dropping consultants.
The muted sales growth - at about 7% - highlights an industry-wide downswing as rising electricity prices, increasing interest rates and high personal debt levels hit consumer spending.
Shoprite warned of a continuing squeeze on the country's consumers, from whom it chalks up the bulk of its sales, after posting its slowest profit growth in 15 years in August.
Shares in Pick n Pay, which are up nearly 10% so far this year, jumped as much as 3.5% in early trade. By 09:46, the stock was trading 2.3% higher at R56.76, outpacing a 0.3% gain in the JSE All-share index.
Once a darling of investors and customers, Pick n Pay is in the middle of a turnaround plan that includes slashing costs while still opening new stores after losing ground to peers such Shoprite Holdings [JSE:SHP].
The Cape Town-based company said diluted headline earnings per share likely increased between 25% and 35% in the six months ended August.
But top-line growth was at least two times slower than profit, a sign that much of that increase in the bottom line came from cuts which included scaling back dividends, reducing staff and dropping consultants.
The muted sales growth - at about 7% - highlights an industry-wide downswing as rising electricity prices, increasing interest rates and high personal debt levels hit consumer spending.
Shoprite warned of a continuing squeeze on the country's consumers, from whom it chalks up the bulk of its sales, after posting its slowest profit growth in 15 years in August.
Shares in Pick n Pay, which are up nearly 10% so far this year, jumped as much as 3.5% in early trade. By 09:46, the stock was trading 2.3% higher at R56.76, outpacing a 0.3% gain in the JSE All-share index.
