Zim prospects impress Pick’n Pay

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One of South Africa’s leading retail chain, Pick’n Pay says it is encouraged by the improved economic and political environment in Zimbabwe.

The company reported diluted headline earnings per share of 162,10 cents for the year ended February 2011, a decrease of 23% from 210,62c a year ago.

Headline earnings per share were at 189,35, down 18,3% from 231,71c. The group declared a total dividend of 142,50c from 174,50c a year ago.

Turnover was up 5,9% at R51,9 billion, but trading profit was down 13,5% to R1,418 billion. Earnings before interest, tax, depreciation and capital items at R2,161 billion, was down 4,9%.

“We now have two stores in Zambia and the support from our new Zambian customers has been extremely gratifying.

“We are once again accounting for our share of profits of our 25% investment in TM Supermarkets in Zimbabwe,” the company said in a statement.

“We are encouraged by the improved economic climate and trading stability in Zimbabwe and are impressed with the hard work of the team at TM.”

Pick’n Pay recently successfully concluded negotiations to purchase a further 24% of TM to bring its total shareholding to 49%. The transaction is awaiting approval by the Reserve Bank of Zimbabwe and the Zimbabwe Indigenisation Board.

Pick’n Pay said the 2011 financial year was the toughest trading year in its history. “We undertook a number of significant and challenging steps to transform the business, at the same time we experienced an exceedingly difficult trading environment,” it said.

The group’s gross profit margin fell from 18,0% to 17,5%, due to aggressive investment in price to regain lost ground after the national strike and the effect of increased franchise participation.

In 2012 the group will open three more stores in Zambia, three in Mozambique and two in Mauritius.