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 The Sharenet Daily 
Wednesday, 23 October 2013 - 20:00
Top News
SA Business
Company News
Company Results
World Markets (Spot Prices)
JSE Today
JSE Trading Statistics
Major Moves
Index Summary
Latest Consensus Changes / Results Expected
Recent Dividends / Ex Div
Upcoming AGMs
Stock Exchange News Service (SENS)

Seed weekly - Pick n Pay ? Encouraged but not yet Satisfied

Pick n Pay Stores Limited has been a household name in South Africa for over 40 years, and the family supermarket chain is synonymous with the Ackerman family and value for money. Although the share price has lagged competitors of late, Pick n Pay remains one of the leading retailers in South Africa and remains positioned for growth under new CEO Richard Brasher of Tesco fame.


The Pick n Pay empire was born in 1967, when Raymond Ackerman purchased four small stores in Cape Town. The company was listed in 1968, and the share price rocketed from R1.00 to R 6.50 and turnover increased to R 5m in the first year of trading. In 1970 Pick n Pay entered the Financial Mail Top 100 companies, and opened SA’s first hypermarket in 1975. The company’s No Name brand was launched in 1976 and R 1 billion annual turnover was reached in 1983.

In 2001 the chain entered the digital age with the introduction of online shopping, a division that has grown into one of SA’s top online businesses and the first to offer 1 hour delivery slots for groceries.

Recent Results

The results for the 2013 financial year were disappointing, and management described it as one of the toughest operating years yet and admitted that a turnaround strategy was in order. Turnover increased by only 6.3% due to depressed economic growth and high levels of household cost inflation, and the trading margin decreased to a thin 1.4%. Management pointed out that investments made in distribution centres and services improvements have not yet started to pay off.

The market held its breath when Pick n Pay released its results for 26 weeks ended 1 September yesterday, and was clearly surprised on the upside judging by the share price jumping up 7.8% in yesterday’s trade.

Group till sales, including owned and franchised stores, was up 8.1% in a very competitive market, and turnover increased by 7.5% to R 30.5bn. This enabled the group to grow headline earnings per share by 35.8%. Internal food inflation was kept to 4.2%, compared to CPI food inflation of 6.4%.

The gross profit margin improved slightly to 18.1%, and the trading margin of 1.1% was a 0.2% improvement over the comparable period last year. Trading expenses increased by 9.4% due to labour costs, increased occupancy costs and customers paying via debit and credit cards instead of cash.

Customer growth stood at 3.3%, a welcome sign that P n P is at least not losing any more customers to competitors.

The graph above illustrates that P n P is stemming market share losses, with the gap in year-on-year growth closing down significantly over the last year.

The group opened 38 new stores in SA during the reporting period, as well as 6 stores across Zambia, Mozambique, Namibia, and Zimbabwe. More than 1,000 stores, of which 60% are owned outright and 40% franchised, are now operated in 8 countries.

The operations in Africa showed an increase in revenue of 32.8% to R 1.6bn for the 100 stores operated. A trading margin of 4.1% was achieved, demonstrating the immense growth potential from Pick n Pay’s potential expansion in these regions.

Current valuation and future prospects

The company currently trades at a high PE of 38 and a dividend yield of about 2%, similar metrics to competitors in the retail sector – albeit off a depressed earnings base. Management has already made significant progress in a short time in improving efficiencies and management performance and accountability. Management aims to strengthen the core SA business first, before establishing the rest of Africa as a second growth engine, and only time will tell if the likes of Shoprite can be beaten in Africa.

Pick n Pay forms part of the share selection universe for the Seed Equity Fund, and is also held in the Seed Flexible Fund by one of our equity managers.

Kind regards,

Cor van Deventer

021 914 4966

Wed, 23 Oct 2013
Top News
South Africa's rand and bonds strengthened on Wednesday after the government cut its budget deficit forecast and sought to demonstrate its fiscal discipline in an interim budget.  Full story

Local markets Resource shares fell 1.76% on Wednesday, leading losses across the board for the JSE. The All Share closed 0.71% lower by 5pm.  Full story
It was a scene that might cause shock in the United States or Britain, where the partisan divide is much deeper, making political compromise seem impossible at times.  Full story
The White House sought to limit the political damage from the troubled rollout of the government's healthcare website as Republicans increased pressure on Wednesday to delay parts of President Barack Obama's signature domestic policy.  Full story
U.S. and Israeli officials differed over Iran's nuclear programme on Wednesday as Israel called for its effective dismantlement and the United States suggested better safeguards could assure that it is peaceful rather than military in nature.  Full story
U.S. stocks fell on Wednesday as shares of Caterpillar and a number of chipmakers tumbled in the wake of results, putting the S&P. . .  Full story
The safe-haven dollar, yen and Swiss franc rose on Wednesday on worries over Chinese monetary policy, while global equity markets ended their recent. . .  Full story
Gold was slightly lower on Wednesday as investors sold to lock in profits after prices hit four-week highs a day earlier in reaction. . .  Full story
European shares snapped a nine-day winning streak on Wednesday, hit by plans for a new, tougher stress test for euro zone banks, as. . .  Full story

Britain's benchmark equity index fell on Wednesday to end a nine-session winning streak, as a drop in heavyweight banking shares dragged the stock. . .  Full story
U.S. stocks opened lower on Wednesday, pressured by weak results from Caterpillar Inc and amid concern over tightening financial conditions in China.. . .  Full story
Britain's benchmark equity index fell on Wednesday to end a 9-day winning streak, as a drop in heavyweight banking shares pushed the stock. . .  Full story
British blue chip shares fell on Wednesday as investors locked in profits on the FTSE 100's five-month high, with stocks now trading without. . .  Full story
SA Business
South Africa's government said the economy would grow less than hoped this year due to strikes and power shortages but promised. . .  Full story
South Africa's Association of Mineworkers and Construction Union (AMCU) intends to declare a dispute over stalled wage talks with Anglo American. . .  Full story
South Africa's Sibanye Gold, spun off earlier this year by Gold Fields, expects earnings to be similar in the second half. . .  Full story
South African maize stocks fell to 5.803 million tonnes at the end of September compared with a revised 6.613 million tonnes. . .  Full story

South Africa's Reserve Bank has been very supportive to growth in its monetary policy, which has shown the right level of. . .  Full story
South Africa's Reserve Bank has been very supportive to growth in its monetary policy, which has shown the right level of coordination with. . .  Full story
Tanzania's current account deficit for the year to August widened 16.6 percent year-on-year to $4.266 billion following a decline in receipt. . .  Full story
South Africa will maintain its weekly government bond auctions and switch programme at current levels while plans to launch a debut. . .  Full story

South Africa slashed its 2013/14 budget deficit forecast to 4.2 percent of GDP on Wednedsay from the 4.6 percent seen in February due to reduced spending and the technical effects of changing how it calculates the balance.. . .  Full story
South Africa on Wednesday slashed growth expectations for this year to 2.1 percent from the 2.7 percent forecast in February, as widespread labour strikes and power constraints stifle the continent's largest economy.. . .  Full story
Company News
Shareholders are referred to the joint announcement released on SENS dated 20 September 2013 which advised shareholders that all resolutions were. . .  Full story
The board of directors of Putprop hereby notifies its shareholders that Mr Johann van Zyl has been appointed as a non-executive. . .  Full story
At the annual general meeting of Implats shareholders held on 23 October 2013, all the ordinary and special resolutions proposed in. . .  Full story
Further to the announcement dated 28 August 2013, the board of directors of MICROmega advised shareholders that MICROmega has appointed Merchantec. . .  Full story

A review of the financial results for the six months ended 31 August 2013 by management has indicated that the earnings per share is expected to be between 0.01 cents and. . .  Full story
Business Report highlighted that Pick n Pay implemented major cost-saving initiatives in the 26 weeks to September and would accelerate expansion to 64 new stores in the second half of. . .  Full story
Resgen has released a webcast with the following details: Resgen Entitlement Offer Update *Speaker: Mr Paul Jury, Managing Director *Live date: Wed, 23 Oct 2013 9:15am AEST *Access this webcast. . .  Full story
Company Results
Turnover increased by 6.2% to R30.1 billion (R28.3 billion). EBITDA was up by 9.9% to R810.5 million (R737.4 million). Gross profit. . .  Full story
Headline earnings for the period amount to R104.5 million (2012: R91.8 million). Headline earnings per share is 20.24 cents (2012: 17.78. . .  Full story
Gold and silver revenue decreased to R484.0 million (R526.8 million). Operating profit declined to R72.0 million (R173.7 million). Gross profit from. . .  Full story
Revenue for the year ended 31 August 2013 increased to R506.7 million (2012: R461.4 million). Operating profit rose by 5.3% to. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0045035.78-322.03-0.71%
JSE Top 4017:0040230.51-313.72-0.77%
JSE Gold17:001336.002.920.22%
JSE Financial17:0033190.31-158.02-0.47%
JSE Industrial17:0059253.31-190.66-0.32%
JSE Indust 2517:0051948.59-160.72-0.31%
JSE Resource17:0050584.55-905.17-1.76%
DJ Futures19:0215315.00-83.00-0.54%
DJ Ind19:5815396.47-71.19-0.46%
SP 50019:581745.34-9.33-0.53%
FTSE 10017:356674.48-21.18-0.32%
All Ords08:005356.80-14.40-0.27%
NZSE 5006:484876.4044.610.92%
NameTimeRPMove% Move
Gold $19:591333.45-6.47-0.48%
Gold R19:5813029.08101.920.79%
Gold R/kg19:5841888520810.50%
Silver $19:5922.5700-.1020-0.45%
Platinum $19:591435.00-13.50-0.93%
Palladium $19:59744.70-5.10-0.68%
Brent Crude19:58108.38-1.26-1.15%
Rand / Dollar19:599.77300.04060.42%
Rand / Pound19:5515.77630.00440.03%
Rand / Euro19:5513.47070.05510.41%
Rand / NZD22/108.2866-0.0234-0.28%
Rand / AUD19:559.4072-0.0467-0.49%
Yen / Dollar19:5997.2670-0.8380-0.85%
Euro / Dollar19:550.7251-0.0003-0.04%
Dollar / Euro19:581.37850.00090.07%
Pound / Dollar19:550.61790.00210.34%

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The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 MMG  200080066.67.%9637
2 CENRAND  4207020.00.%5000
3 ALERT  1501511.11.%66001
4 GOLDONE  2052010.81.%228500
5 ELLIES   645467.68.%3528484
6 AFRIMAT  1289887.33.%72768
7 STEFSTOCK  1029596.08.%109813
8 SANTOVA  11765.41.%566121
9 PICKNPAY  47802274.99.%3014792
10 CADIZ  13364.72.%59580
11 ASCEN B  240104.35.%1199540
12 HARMONY  35931394.02.%2338774
13 PIKWIK  2100753.70.%476816
14 OCTODEC  2012603.05.%247074
15 CAT  1900552.98.%53018
16 PHUMELELA  1750502.94.%110861
17 TRNSHEX  353102.92.%11986
18 AFOVR-N  875242.82.%2000
19 ACUCAP  46861162.54.%20126
20 MASTDRILL  1050252.44.%50000

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Major Moves Down
SharenameSaleMove% MoveVolume
1 DIAMONDCP  118-27-18.62.%30750
2 VUNANI  156-32-17.02.%120
3 CULLINAN  200-20-9.09.%2907
4 WITSGOLD  800-80-9.09.%20231
5 FONEWORX  230-15-6.12.%3272
6 DAWN  900-55-5.76.%45534
7 ABIL  1685-91-5.12.%2398056
8 HOSP-B  500-26-4.94.%22231
9 DIPULA-B  800-40-4.76.%44350
10 KUMBAIO  40397-2008-4.74.%2388460
11 EXXARO  15100-615-3.91.%1135281
12 KEATON   202-8-3.81.%56143
13 BLUETEL  875-34-3.74.%214444
14 BRIMSTON  1350-50-3.57.%8100
15 YORK  380-14-3.55.%12900
16 LITHA  275-10-3.51.%1500
17 REUNERT  7086-254-3.46.%189946
18 ZEDER  420-14-3.23.%1848426
19 ANGLO  23715-755-3.09.%3407530
20 HOLDSPORT  4750-150-3.06.%95473

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New Highs
SharenameSaleHighMove% MoveVolume
1 MMG  2000200080066.67.%9637
2 AFRIMAT  12891289887.33.%72768
3 PIKWIK  21002146753.70.%476816
4 STEINHOFF  39804004601.53.%4273281
5 INTUPROP  53165339661.26.%384709
6 ALTRON-P  23002383200.88.%169693
7 CASHBIL  1577116200880.56.%13796
8 METAIR  403040810.178169
9 CML  786079260.557092
10 PSG  82008440-39-0.47.%76346
11 NETCARE  25252560-25-0.98.%1330163
12 TRANSCAP  790818-14-1.74.%406979

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New Lows
SharenameSaleLowMove% MoveVolume
1 KUMBAIO  4039739800-2008-4.74.%2388460
2 VIVIDEND  48547051.04.%2038571
3 ELLIES   645571467.68.%3528484

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Index Summary
Index NameRPMove% Move
Top 4040,230.51-313.72-0.77%
Mid Cap59,688.73-233.64-0.39%
Small Cap49,850.38-161.35-0.32%
Resource 2050,584.55-905.17-1.76%
Industrial 2551,948.59-160.72-0.31%
Financial 1512,565.10-64.09-0.51%
Financial & Ind. 3055,119.89-196.03-0.35%
All Share45,035.78-322.03-0.71%
Oil & Gas 37,837.28-364.75-0.95%
Mining 30,542.72-572.30-1.84%
Gold Mining1,336.002.920.22%
Platinum Mining49.91-1.10-2.16%
GENERAL MINING8,719.33-178.88-2.01%
Oil & Gas Producers 20,344.41-196.12-0.95%
Basic Materials 27,133.53-476.65-1.73%
Chemicals 23,712.23-60.29-0.25%
Forestry & Paper 28,631.89-35.58-0.12%
Industrial Metals 22,126.49-831.63-3.62%
Industrials 43,610.42-286.75-0.65%
General Industrials 130.40-1.20-0.91%
Consumer Goods 54,904.00325.970.60%
Automobiles & Parts 9,
Household Goods270.5241.53%
Health Care 76,453.41-579.17-0.75%
Index NameRPMove% Move
Food Producers 70,943.04-56.67-0.08%
Personal Goods 1,032.527.690.75%
Consumer Services 10,398.83-130.82-1.24%
General Retailers 66,685.20-363.00-0.54%
Travel & Leisure 5,620.54-75.61-1.33%
Media 205.43-4.75-2.26%
Support Services 2,666.089.050.34%
Telecommunications 9,526.87-102.93-1.07%
Financials 33,190.31-158.02-0.47%
Banks 57,476.51-281.35-0.49%
Non-life Insurance 50,163.90893.281.81%
Life Insurance 31,838.65-311.30-0.97%
General Financial 3,035.39-18.97-0.62%
Technology 44,770.16204.980.46%
SHARIAH TOP40 3,779.38-55-1.43%
FTSE/JSE SHARIAH ALL3,910.30-49-1.24%
COAL MINING19,120.92-763-3.84%
FTSE JSE Fledgling 6,153.631212.00%
FTSE/JSE Alt X 1,038.35-0-0.04%
RESOURCE 27,688.98-474-1.68%
DIVIDEND PLUS217.71-2-0.91%
FTSE/JSE RAFI 408,897.28-79-0.88%
Capped Top 4021,292.75-165-0.77%
Capped All Share22,811.53-161-0.70%
JSE TABACO 6,810.80-15-0.22%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
24/10/2013ADRENNAAugust 2013 (Interim)
24/10/2013ADRENNAPAugust 2013 (Interim)
24/10/2013CLICKSAugust 2013 (Final)
24/10/2013IMUNITI-PAugust 2013 (Interim)
24/10/2013NUTRITIONAugust 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
PIKWIK22/10/1306/12/1317/12/13ZAR 0.0720
PICKNPAY22/10/1306/12/1317/12/13ZAR 0.1480
OASIS18/10/1308/11/1318/11/13ZAR 0.4308
ADCORP17/10/1329/11/1309/12/13ZAR 0.6000
DATATEC16/10/1322/11/1302/12/13USD 0.0800
Ex Div**
Share NameDec-DateLDTPay-DateAmount
CAXTON6%CPP28/08/1318/10/1328/10/13ZAR 4.5000
ASTRAPAKP27/09/1318/10/1328/10/13ZAR 3.8917
SHFINV-PREF10/09/1318/10/1328/10/13ZAR 3.4800
ILRPREF130/09/1318/10/1328/10/13ZAR 1.5647
EOH11/09/1318/10/1328/10/13ZAR 0.9500

Upcoming AGMs**
CodeCompany NameDateStatus
IMPImpala Platinum Holdings Ltd.23/10/2013Confirmed
IMPCBImpala Platinum Holdings Ltd.23/10/2013Confirmed
ARHARB Holdings Ltd.23/10/2013Confirmed
SNUSentula Mining Ltd.24/10/2013Unconfirmed
PNCPinnacle Technology Holdings Ltd.25/10/2013Confirmed

Stock Exchange News Service
23/10/201317:45DATACENTRIX HOLDINGS LIMITED - Notification In Terms Of Section 122(3) Of The Co...
23/10/201317:42MVELASERVE LIMITED - Fulfilment of scheme conditions
23/10/201317:22HYPROP INVESTMENTS LIMITED - Dealings in securities by an associate of a directo...
23/10/201317:16IVUZI INVESTMENTS LIMITED - New Instrument Listing - IVA404
23/10/201317:10FIRSTRAND BANK LIMITED - Full Capital Redemption - FRS80
23/10/201317:08JSE LIMITED - Index Change Advice - Redefine International PLC Unbundling From R...
23/10/201317:05IVUZI INVESTMENTS LIMITED - Full Capital Redemption - IVA343
23/10/201317:05JSE LIMITED - Index Change Advice - Racec Group Deletion
23/10/201317:00INDWA INVESTMENTS LIMITED - Interest Rate Reset - IN01Q
23/10/201316:55AUSTRO GROUP LIMITED - Update in respect of the mandatory offer to be made to th...
23/10/201316:21PUTPROP LIMITED - Change To The Board Of Directors
23/10/201316:20INTU PROPERTIES PLC - Notification of Transactions of Directors/Persons Discharg...
23/10/201316:15INTU PROPERTIES PLC - Notification of Major Interests in Shares
23/10/201316:00CLOVER INDUSTRIES LIMITED - Dealing in securities by a director of the company
23/10/201315:30REDEFINE PROP INTERNATIONAL LTD - Notice of full year results
23/10/201315:13ASTRAL FOODS LIMITED - Trading Statement
23/10/201314:30IMPALA PLATINUM HOLDINGS LIMITED - Results of Annual General Meeting
23/10/201314:19VIVIDEND INCOME FUND LIMITED - Reviewed condensed financial results for the year...
23/10/201314:06ARB HOLDINGS LIMITED - Results of Annual General Meeting
23/10/201314:00TRANSACTION CAPITAL LIMITED - Withdrawal of cautionary announcement
23/10/201312:30ADVTECH LIMITED - Directors dealings
23/10/201312:30OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
23/10/201312:15ELLIES HOLDINGS LIMITED - Dealings in securities by a director of the company
23/10/201311:55MICROMEGA HOLDINGS LIMITED - Change of Sponsor
23/10/201311:23ELB GROUP LIMITED - Dealing in securities by a director
23/10/201311:20GROWTHPOINT PROPERTIES LIMITED - Renewal of Cautionary Announcement
23/10/201310:15PSV HOLDINGS LIMITED - Trading statement
23/10/201309:54NEW GOLD ISSUER LIMITED - NGPLT - Listing of additional NewGold Platinum Debentu...
23/10/201309:53ESKOM HOLDINGS SOC LIMITED - Pricing Supplement - ES42
23/10/201309:52ESKOM HOLDINGS SOC LIMITED - EL30 - Pricing Supplement
23/10/201309:50SIBANYE GOLD LIMITED - Updated trading statement for the six-month period ending...
23/10/201309:30CONTROL INSTRUMENTS GROUP LIMITED - Notification in terms of S122(3) of the Comp...
23/10/201309:15RESOURCE GENERATION LIMITED - "Resource Generation Entitlement Offer Update" BRR...
23/10/201309:00Transnet SOC Limited - TN25 Bond Tap
23/10/201308:30TRANSACTION CAPITAL LIMITED - Terms announcement relating to the disposal of Bay...
23/10/201308:00BRITISH AMERICAN TOBACCO PLC - Interim management statement for the nine months ...
23/10/201308:00SATRIX COLLECTIVE INVESTMENT SCHEME - Listing of additional Satrix 40 securities...
23/10/201307:15BANK OF CHINA LIMITED - BCJ02 - Interest Rate Reset
23/10/201307:10OCTODEC INVESTMENTS LIMITED - Reviewed provisional results of the group for the ...
23/10/201307:10PREMIUM PROPERTIES LIMITED - Unaudited interim results of the group for the six ...
23/10/201307:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

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