Pick n Pay Stores said that first-half profit climbed 23 per cent as the South African supermarket chain added outlets and cut costs, even as consumer confidence in its home market remains depressed.
Profit increased to 322.5 million rand ($24 million) in the six months through 30 August, compared with 261.9 million rand a year earlier, the Cape Town-based company said in a statement on Tuesday. Sales rose 8.5 per cent, and it opened 83 Pick n Pay and Boxer stores in the period. The company raised the interim dividend 24 per cent to 0.24 rand a share.
“Trading conditions remain tough in South Africa and other markets, with strong retail competition for customers who are coming under increasing financial pressure at all levels of society,” Pick n Pay said. The company “has remained focused on improving its operational efficiency”.
South African retailers are battling with consumer confidence that remains muted, as shoppers hold back on spending, even as fuel prices have fallen. Unemployment of 25 per cent and almost daily power cuts earlier this year also weighed on households.
The shares fell 8.2 per cent – the most in almost 14 years – on 2 October, when the company warned that business conditions remain difficult and first-half earnings missed estimates. The stock has risen 16 per cent this year, compared with a 4.8-per-cent gain on the FTSE/JSE Africa Food & Drug Retailers Index.
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