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Trading statement
Pick n Pay Stores Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1968/008034/06)
Share Code: PIK
ISIN code: ZAE000005443
Trading statement
Shareholders are advised that Pick n Pay Stores Limited (“the Group”) is in the process of
finalising their financial results for the financial year ended 2 March 2014, which are expected
to be published on 15 April 2014.
Despite a more challenging trading environment, the Group will deliver an improved financial
performance for the 2014 financial year. Annual turnover growth was 7.7% on a comparable
364-day basis*. Turnover growth on last year’s published 368 days was 6.5%. The Group’s improved
financial performance reflects in large measure the encouraging progress over the past year in
reducing cost through greater organisational and operational efficiency, and stronger financial
control across the business.
During the 2014 financial year the Group completed the centralisation of its buying, operational
and finance support functions. Some systems and reporting tools previously developed to support
the decentralised business operation became obsolete. This has necessitated an impairment of
certain intangible assets, which will be reflected in the financial results.
We expect the results for the financial year ended 2 March 2014, expressed as growth on the
previous year, to fall within the following ranges:
Growth on prior
Growth on prior year as adjusted
year as published (pro-forma)*
368 days 364 days
HEPS and diluted HEPS will increase between 20% and 30% 35% and 45%
EPS and diluted EPS will increase between 1% and 10% 15% and 25%
HEPS excludes the impairment of intangible assets, which accounts for the difference in the
year-on-year increase between HEPS and EPS.
The Group is encouraged by this improved financial performance. However, much work remains to be
done in what is a difficult trading environment. Our strategic focus remains that of
customer-driven and sales-led growth, with progress on efficiency and expense control enabling us
to invest in the shopping trip and deliver a consistently excellent customer experience.
*Pro-forma financial information
The Group implemented a 52-week financial reporting calendar in February 2013. The 52-week
financial reporting calendar reflects that revenue and gross profit is managed on a daily basis and
is aggregated into 52 trading weeks of 364 days. All other items included in profit before tax
(other than those included in gross profit) are managed on a calendar month basis and are not
pro-rated to days or weeks.
The profit for the year consists of 52 weeks of gross profit and 12 calendar months of other
income and trading expenses. As a result of this change, the 2014 annual financial period began on
4 March 2013 and ended on 2 March 2014 (364 trading days). This compares to the 2013 annual
financial period which ran from 1 March 2012 to 3 March 2013 (368 trading days). The 2013 financial
period therefore included four extra days of turnover and related gross profit. Other income and
expenditure between the two years is comparable, with both the 2014 and 2013 financial years
reporting a full 12 calendar months of other income and trading expenses.
The results reported in this trading statement are presented on both a pro-forma comparable
52-week basis (with adjusted prior year numbers) and on an actual (unadjusted) basis. The
pro-forma 2013 result presented excludes 4 days of turnover and gross profit relating to items sold
during 1 to 4 March 2012. The accounting policies applied in calculating the impact of the additional
trading days are consistent with those applied in the Group’s consolidated annual financial statements.
The tax rate applied is the effective tax rate relating to the relevant entities within the Group. The
pro-forma information has been prepared for illustrative purposes only and is the responsibility of the
directors and because of its nature, may not fairly present the financial position, changes in
equity, results of operations or cash flows.
The 2013 prior year numbers which form the base of this announcement are:
Prior year
Prior year as adjusted
as published Effect of new (pro-forma)
368 days trading calendar 364 days
R’ million R’ million R’ million
Turnover 59 271.3 (663.8) 58 607.5
Gross profit (note 1) 10 335.4 (100.7) 10 234.7
Other trading income (note 1) 518.9 - 518.9
Trading expenses (10 001.9) - (10 001.9)
Tax (258.3) 30.7 (227.6)
Profit 550.6 (70.0) 480.6
cents cents cents
HEPS 111.30 (14.64) 96.66
Diluted HEPS 109.61 (14.42) 95.19
EPS 115.14 (14.64) 100.50
Diluted EPS 113.39 (14.42) 98.97
Note 1 - during the year under review, trading income of R174.5 million previously included in
gross profit has been reclassified and disclosed separately as other trading income. This has
been done to improve visibility of all other trading income, specifically commissions received.
The prior year has been restated to align with the current year disclosures.
This trading statement has not been reviewed by or reported on by the Group’s auditors.
By order of the board
Cape Town
4 April 2014
Sponsor: Investec Bank Limited
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