To view the PDF file, sign up for a MySharenet subscription.

PICK N PAY STORES LIMITED - Updated trading statement for the 26 weeks ended 27 August 2017

Release Date: 02/10/2017 14:00
Code(s): PIK     PDF:  
Wrap Text
Updated trading statement for the 26 weeks ended 27 August 2017

Pick n Pay Stores Limited
Incorporated in the Republic of South Africa
Registration number: 1968/008034/06
Share Code: PIK
ISIN code: ZAE000005443


Updated trading statement for the 26 weeks ended 27 August 2017

Shareholders are referred to the announcement released on SENS on 31 July 2017 and are
now advised that:

   -   Group headline earnings per share are:
          - expected to increase between 10% and 15% on a normalised basis, excluding
             the impact of the voluntary severance programme (“VSP”)
          - expected to decrease between 20% and 25%, including the impact of the VSP

Richard Brasher, Chief Executive Officer, said:

       “We have the right plan for tougher times, and have accelerated its delivery over the
       past six months. In a difficult economy, customers want even better value. We have
       cut our costs, modernised Smart Shopper, made more progress on centralisation, and
       are buying better. These steps are critical in delivering lower prices, a better shopping
       trip, and more customers.

       “The VSP was a key step in modernising our business and reducing our costs. It had a
       once-off cost which has impacted on our first-half result. But this cost will be fully
       recovered in the current financial year. On a normalised basis, excluding the VSP, we
       again delivered a double-digit improvement in profitability.”

Pick n Pay Stores Limited (“the Group”) is in the process of finalising its 2018 interim financial
results for the 26 weeks ended 27 August 2017, which will be published on Tuesday, 17
October 2017.

The Group is encouraged that progress in delivering its plan is evident in its financial
performance for the first half of the 2018 financial year. Measured on a normalised basis,
excluding the once-off impact of the VSP, headline earnings per share will increase between
10% and 15% on the prior year.

The Group delivered turnover growth of 5.1% in the period. This reflected a challenging
trading environment, and investment in lower prices to customers, with the Group restricting
its selling price inflation to 3.6%, well below published CPI food inflation at 6.9%.

The Group issued a trading statement on 31 July 2017 explaining that the total cost of the VSP
for staff would fall in the first half of the financial year, offset only in part by the related
savings during the reporting period. Taking into account this once-off impact, headline
earnings per share will decrease between 20% and 25% on the prior year. The cost of the
programme will be fully recovered by the end of the financial year through resulting savings
in employee costs, and will deliver substantial savings in future years.
The VSP was one of a number of steps that the Group has taken over the past six months to
accelerate progress on its turnaround in a difficult consumer economy. As well as reducing
operating costs and improving efficiency, the Group has modernised its Smart Shopper loyalty
programme, further centralised its supply chain, and implemented a plan to buy better from
suppliers. These and other steps are changing the trajectory of the Group’s performance,
with lower costs creating the headroom to deliver better value for customers.

The Group expects the results for the 26 weeks ended 27 August 2017, expressed as growth
on the previous year, to fall within the following ranges:

On a normalised basis (excluding the net cost of the VSP)


                                                                 26 weeks to        26 weeks to
                                                                   27 August          28 August
                                                                         2017               2016
                                                Expected      Expected range              Actual
                                                   range      cents per share    cents per share
 HEPS will increase between                 10% and 15%          90.67 - 94.79               82.43
 Diluted HEPS will increase between         10% and 15%          87.86 - 91.85               79.87
 Basic EPS will increase between            15% and 20%          90.49 - 94.43               78.69
 Diluted basic EPS will increase between    15% and 20%          87.68 - 91.49               76.24


Including the net cost of the VSP

                                                                 26 weeks to        26 weeks to
                                                                   27 August          28 August
                                                                         2017               2016
                                                 Expected     Expected range              Actual
                                                    range     cents per share    cents per share
 HEPS will decrease between                  20% and 25%         61.82 - 65.94               82.43
 Diluted HEPS will decrease between          20% and 25%         59.90 - 63.90               79.87
 Basic EPS will decrease between             20% and 25%         59.02 - 62.95               78.69
 Diluted basic EPS will decrease between     20% and 25%         57.18 - 60.99               76.24

The financial information on which this trading statement is based has not been reviewed by
or reported on by the Group’s external auditors.


By order of the Board
Cape Town
2 October 2017                                              Sponsor: Investec Bank Limited

Date: 02/10/2017 02:00:00 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.

Share This Story