Pick n Pay interim earnings down 56.3%, hurt by Covid-19 restrictions

Trading restrictions affected up to 20 percent of the group’s interim revenue at different stages of the nationwide lockdown in response to the coronavirus, and sales were further impacted by reduced trading hours, limits on the number of customers in stores, and temporary store closures.

JOHANNESBURG, October 20 (ANA) – South Africa’s second largest supermarket chain, Pick n Pay, on Tuesday reported a 56.3 percent drop in headline earnings per share for the six months to August 30, citing trading restrictions due to the Covid-19 pandemic.

Trading restrictions affected up to 20 percent of the group’s interim revenue at different stages of the nationwide lockdown in response to the coronavirus, and sales were further impacted by reduced trading hours, limits on the number of customers in stores, and temporary store closures.

These restrictions resulted in an estimated R2.8 billion (US$169 million) in lost sales over the period, the company said.

Group earnings were impacted by additional measures taken to protect staff and customers during the lockdown, resulting in R150 million in additional operating costs.

A further R100 million was fully expensed in the six months relating to the group’s voluntary severance programme initiated at the beginning of the financial year.

Operations in the rest of Africa were also impacted by Covid-19 restrictions, but remained profitable and contributed R2 billion of segmental revenue, although this was down 10.3 percent on last year.

Zimbabwe recorded a solid trading and earnings performance, growing its market share even as the country continued to cope with severe currency weakness and escalating hyperinflation.

Zambia also experienced difficult economic and trading conditions, with a weakening currency driving up the cost of imports and fuelling cost inflation, but nonetheless remained a solid, sustainable business.

“Although the pandemic inevitably impacted our sales and profit, we have delivered a resilient result, with many reasons to be positive about the future,” Pick n Pay chief executive officer Richard Brasher said.

As customers grappled with a very difficult six months, with unemployment reaching record levels and many families suffering sharp falls in income, the retailer responded by getting even tighter on costs, investing R500 million in the price on everyday essentials and deepening its promotions, he said.

“We also responded well to the surge in demand for online shopping,” Brasher said, adding that Pick n Pay Online was the largest online grocery offer in sub-Saharan Africa.

Pick n Pay has stores in South Africa, Namibia, Botswana, Zambia, Mozambique, Mauritius, Swaziland and Lesotho, and owns 49 percent of Zimbabwean business TM Supermarkets.

– African News Agency (ANA), Editing by Stella Mapenzauswa