Pick n Pay Stores Ltd announced plans to enter Nigeria as it posted a 26-per-cent increase in full-year profit after opening 175 new stores.
The company, based in Cape Town, said that it agreed to partner with Lagos-based AG Leventis & Co. to enter Africa’s largest economy.
"A key part of the group’s strategy is to establish a second engine of growth in markets in the rest of Africa," the company said in a recent statement. Pick n Pay will hold 51 per cent of the operation in Nigeria, “which will roll out a combination of large and smaller formats to meet consumer needs."
South African retailers are facing headwinds including weak domestic consumer confidence, rising interest rates and a weak rand, which has declined 16 per cent against the dollar over the past 12 months. The central bank forecasts economic growth for South Africa of 0.8 per cent this year, the slowest pace since a 2009 recession.
Earnings per share excluding one-time items rose to 2.24 rand in the year through February, Pick n Pay said. The median estimate of seven analyst estimates compiled by Bloomberg was for adjusted earnings per share of 2.18 rand.
The company restricted selling-price inflation to 3.1 per cent over the year amid "an increasingly challenging economic environment" facing South African consumers, it said. Sales advanced 8.2 per cent to 72.4 billion rand ($5 billion), and the trading-profit margin improved to 2.1 per cent from 1.9 per cent in 2015.
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