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We take a look at the trading update brought out by Pick n Pay (PIK) for the period ending March 2019. So has the group been struggling like the rest of the retailers in South Africa?
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Trading update by Pick n Pay below
Shareholders are advised that Pick n Pay Stores Limited (“the Group”) is in the process of finalising its 2019 financial results for the 53 weeks* ended 3 March 2019, which are expected to be published on 26 April 2019.
The Group delivered turnover growth of 9.6% in the 53 weeks of the 2019 financial year. On a comparable 52-week basis, turnover increased by 7.1%, with like-for-like turnover growth of 4.8%. With selling price deflation of 0.3% over the year, the Group achieved like-for-like volume growth of 5.1%. The Group’s core South Africa division delivered comparable turnover growth of 7.4%. Through a combination of its Pick n Pay and Boxer brands, the Group demonstrated consistent market share gains across the year.
This achievement, in a very challenging trading environment, underlines the effective and consistent execution of the Group’s long-term plan. Over the past six years, a strong focus on improving cost and operational effectiveness has enabled the Group to invest in a winning customer offer through lower prices, more attractive promotions, better and more innovative products, compelling value-added services, and brighter and more modern stores.
This trading performance was delivered despite a difficult consumer environment in South Africa, and some challenges elsewhere, in particular a testing economy in Zambia, and currency uncertainty and disruption in Zimbabwe. Notwithstanding this challenging background, the Group expects to deliver on its goal of maintaining momentum on earnings growth alongside improved turnover growth. The Group expects the results for the 2019 financial year, expressed as growth on the prior period, to fall within the following ranges:
The Group delivered turnover growth of 9.6% in the 53 weeks of the 2019 financial year. On a comparable 52-week basis, turnover increased by 7.1%, with like-for-like turnover growth of 4.8%. With selling price deflation of 0.3% over the year, the Group achieved like-for-like volume growth of 5.1%. The Group’s core South Africa division delivered comparable turnover growth of 7.4%. Through a combination of its Pick n Pay and Boxer brands, the Group demonstrated consistent market share gains across the year.
This achievement, in a very challenging trading environment, underlines the effective and consistent execution of the Group’s long-term plan. Over the past six years, a strong focus on improving cost and operational effectiveness has enabled the Group to invest in a winning customer offer through lower prices, more attractive promotions, better and more innovative products, compelling value-added services, and brighter and more modern stores.
This trading performance was delivered despite a difficult consumer environment in South Africa, and some challenges elsewhere, in particular a testing economy in Zambia, and currency uncertainty and disruption in Zimbabwe. Notwithstanding this challenging background, the Group expects to deliver on its goal of maintaining momentum on earnings growth alongside improved turnover growth. The Group expects the results for the 2019 financial year, expressed as growth on the prior period, to fall within the following ranges:
Share price performance
The screenshot (taken from Sharenet) below shows the performance of PIK for the day and over various time periods. And as the numbers show longer term PIK has been offering investors a mixed bag over the years, with the last day showing string results, short to mid term showing negative resuslts and longer term results being positive again.
The summary below shows the share price returns of PIK over various time periods:
And based on the market reaction to PIK's profit announcement today, we suspect the market liked what PIK reported and that the share price performance over the short term will spike based on the relatively good news out of the group.
- 1 day: 4%
- 1 month: -2.54%
- Year to Date (YTD): -0.83%
- 1 Year: -0.83%
- 3 Years: 4.33%
- 5 Years: 32.72%
And based on the market reaction to PIK's profit announcement today, we suspect the market liked what PIK reported and that the share price performance over the short term will spike based on the relatively good news out of the group.