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 Date: 04/04/2014 04:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.