Pick n Pay | Working together
PIK's H1'19 is its strongest six-month trading volume in over five years. Normalised diluted HEPS increased 17% yoy excluding retrenchment costs in H1 '18. Group and LFL turnover for H1 '19 grew 6.4% and 3.8% yoy respectively due to a reduction in the prices of every day grocery lines. LFL volumes grew by 3.5% yoy in H1 '19 which implies market share gains. Gross profit margin remains constant yoy at 18.6% for H1 '19 despite low internal inflation of 0.3%. Lower soft commodity prices and intense promotional actively should keep PIK internal inflation moderate over the short to medium term. Together with good opex control and strong volume growth, PIK is yielding higher normalised trading margins in SA. Distribution efficiencies are releasing working capital, which support reinvestment (c.R1.7bn capex in FY ‘19). Management is gradually renewing its focus on Africa ex-SA and will expand its footprint in neighbouring countries and West Africa.Pick n Pay is an investment holding company. Co. has two operating segments, namely South Africa and Rest of Africa. Co. provides food, non-edible groceries, clothing, liquor and tobacco, health and beauty products, building and hardware and general merchandise. Co.'s offer also includes additional services such as financial transactions at till points (including mobile money), ticketing services and the sale of gift cards. In addition to manufacturer-branded products, Co. has a number of Pick n Pay and Boxer private label products to suit every budget. Co. operates on both an owned and franchise basis. Co.'s stores range from hypermarkets to small convenience stores.
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