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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
(“Pick n Pay” or “the Group”)
Trading statement
Shareholders are advised that Pick n Pay Stores Limited (“the Group”) is in the process of
finalising its 2019 interim financial results for the 26 weeks ended 26 August 2018, which are
expected to be published on 16 October 2018.
The Group delivered turnover growth of 6.4% in the first half of the financial year, with like-
for-like turnover growth of 3.8%. With internal selling price inflation held at 0.3%, the Group
delivered like-for-like volume growth of 3.5%. The Group’s core South Africa division grew
turnover by 6.7%, demonstrating clear market share growth over the period.
In achieving this performance, the Group benefited from the decisive action it took last year
to create a leaner and fitter business, equipped to compete effectively in an increasingly
tough trading environment. Savings and efficiencies unlocked last year have enabled the
Group to invest in and strengthen its customer offer. This has delivered better value to
customers and a stronger operating model: the Group’s growth in turnover has been
achieved at a time of constrained consumer spending, without any sacrifice in earnings or
profit margin.
The Group expects the results for the 26 weeks ended 26 August 2018, expressed as growth
on the prior period, to fall within the following ranges:
As previously
Expected 26 weeks to Restated* reported
growth range 26 August 2018 26 weeks to 26 weeks to
on prior Expected range 27 August 2017 27 August 2017
period cents per share cents per share cents per share
HEPS will increase between 75% and 85% 97.14 – 102.69 55.51 61.88
Diluted HEPS will increase between 75% and 85% 95.43 – 100.88 54.53 60.78
Basic EPS will increase between 80% and 90% 98.39 – 103.85 54.66 61.03
Diluted basic EPS will increase between 80% and 90% 96.64 – 102.01 53.69 59.94
*The prior period financial numbers have been restated, in line with the restatements applied in the 52 weeks ended 25 February
2018. Please refer to the appendix provided for further information.
The Group provided shareholders with a normalised result in the first half of last year,
removing the once-off earnings impact of the voluntary severance programme (VSP)
undertaken in May 2017. The Group removed R200 million cost, net of tax, from reported
earnings in the prior period, being the R250 million cost of severance packages, net of
related labour cost savings. The cost of the VSP was fully recovered by the end of the 2018
financial year.
The Group expects the results for the 26 weeks ended 26 August 2018, expressed as growth
on the prior period’s normalised result, to fall within the following ranges:
Expected As previously
Growth 26 weeks to Restated* reported
range 26 August 2018 26 weeks to 26 weeks to
on prior Expected range 27 August 2017 27 August 2017
Normalised period cents per share cents per share cents per share
HEPS will increase between 13% and 20% 97.14 – 102.69 85.62 91.99
Diluted HEPS will increase between 13% and 20% 95.43 – 100.88 84.11 90.36
Basic EPS will increase between 16% and 23% 98.39 – 103.85 84.77 91.14
Diluted basic EPS will increase between 16% and 23% 96.64 – 102.01 83.27 89.52
*The prior period financial numbers have been restated, in line with the restatements applied in the 52 weeks ended 25 February
2018. Please refer to the appendix provided for further information.
The Group does not expect trading conditions to ease significantly over the coming months.
However, in demonstrating the ability to compete in a low-growth trading environment,
this result underlines the tangible progress achieved in delivering the Group’s long-term
strategy. Strong discipline on cost, improved execution, and a relevant and competitive
customer offer, are the foundations of the progress achieved in Pick n Pay and Boxer, and
provide a strong platform for future growth.
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
20 September 2018 Sponsor: Investec Bank Limited
Appendix - Prior period restatement
During the 52 weeks ended 25 February 2018 the Group re-evaluated its accounting policy
for rebates and other income earned from suppliers, and as a result reclassified certain
elements of supplier income received, which impacted its inventory valuation methodology.
Please refer to note 28 of the 2018 audited Group annual financial statements for further
information.
The Group’s earnings for the 26 weeks ended 27 August 2017 have been restated, in line
with the restatements applied in 2018. The table below details the effect of the restatement
on the previously reported earnings.
Previously
reported Restated
26 weeks to Effect of 26 weeks to
27 August 2017 restatement 27 August 2017
cents per share cents per share cents per share
HEPS 61.88 (6.37) 55.51
Diluted HEPS 60.78 (6.25) 54.53
Basic EPS 61.03 (6.37) 54.66
Diluted basic EPS 59.94 (6.25) 53.69
Normalised HEPS 91.99 (6.37) 85.62
Normalised diluted HEPS 90.36 (6.25) 84.11
Normalised basic EPS 91.14 (6.37) 84.77
Normalised diluted basic EPS 89.52 (6.25) 83.27
Date: 20/09/2018 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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