Unaudited condensed consolidated interim results for the 26 weeks ended 29 August 2021 and declaration of dividend
Pick n Pay Stores Limited
Incorporated in the Republic of South Africa
Registration number: 1968/008034/06
JSE share code: PIK
("Pick n Pay" or "the Group")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE 26 WEEKS ENDED 29 AUGUST 2021 AND DECLARATION OF INTERIM DIVIDEND
This short-form announcement is the responsibility of the directors and is an abridged summary of the information contained in the Group's full H1 FY22
interim result announcement.
Any investment decision should be based on the full announcement published on the Group's website at www.picknpayinvestor.co.za and on the JSE website using
the following link https://senspdf.jse.co.za/documents/2021/jse/isse/PIK/FY22H1.pdf.
Copies of the full announcement are available for inspection at, or may also be requested from, the Group's registered office or the office of our sponsor,
at no charge, during office hours. To request a copy of the full announcement, contact our Company Secretary, Debra Muller at firstname.lastname@example.org.
The information contained in this announcement has neither been audited nor reviewed by the Group's external auditors.
Resilience in the face of unprecedented external disruption
26 weeks to 26 weeks to
29 August 2021 30 August 2020
Key financial indicators H1 FY22 H1 FY21 % change
Group turnover R46.0 billion R44.2 billion 4.1%
Gross profit margin 18.2% 19.6%
Trading expenses R8.9 billion R8.5 billion 4.1%
Net finance charges R622.9 million R656.9 million -5.2%
Comparable profit before tax(1) R481.2 million R258.3 million 86.3%
Comparable profit before tax - South Africa(1) R389.6 million R211.4 million 84.3%
Profit after tax R296.8 million R158.7 million 87.0%
Headline earnings per share (HEPS) 61.28 cents 43.78 cents 40.0%
Comparable HEPS(1) 70.85 cents 37.12 cents 90.9%
FY22 - interim dividend per share 35.80 cents 18.74 cents 91.0%
Group comparable headline earnings per share increased 90.9% year-on-year, a resilient performance in a period marked by unprecedented civil disorder in
South Africa and the resumption of government restrictions on alcohol sales in response to the third wave of the Covid-19 pandemic.
The Group entered the FY22 financial year with positive trading momentum, and delivered a strong first quarter result, with Group sales up 9.0% against a
prior period severely impacted by Covid-19.
Trading disruptions became a significant feature of the Group's second quarter, with a resumption of government restrictions on alcohol sales (55 days of
lost liquor trade) and the unprecedented civil unrest in KwaZulu-Natal and parts of Gauteng.
The unrest had a considerable impact on Group operations with severe damage to 212 stores, the destruction of two large distribution centres, and the
temporary closure of 551 stores for safety reasons. As a result of both the unrest and disruption to liquor sales, the Group's second quarter sales growth
fell to -0.7%.
The Group estimates that the trading disruptions resulted in lost sales of approximately R1.7 billion(2) in the Group's second quarter of FY22: R930 million
in respect of the civil unrest and R800 million as a result of liquor restrictions. Adding back this estimate of current period trade lost, the Group
estimates it would have delivered sales of R47.7 billion this half, up 8.0% on the same period last year.
Gross profit at 18.2% of turnover also reflects the severe financial impact of the civil unrest, including material stock losses and increased costs of
security across the Group's distribution channel. Despite material disruption from the unrest, the Group delivered further supply chain efficiency and
productivity gains, allowing for important price investment over the period, with selling price inflation contained at 3.6% year-on-year, against CPI Food
inflation of 6.5%.
The Group's Project Future modernisation programme delivered further cost savings across Group operations, with the increase in trading expenses contained
at 4.1%. Effective working capital management played a pivotal role in sustaining the Group's strong liquidity position over the period, with the Group's
cost of debt funding down 69.3% over the period.
As soon as the civil unrest began to subside, the Group made rapid progress in rebuilding and re-opening its damaged store estate and distribution network.
The Group has received substantial payments from insurers, and has provided for the recovery of the majority of its losses in this result. Group comparable
headline earnings per share increased 90.9% year-on-year, underpinned by strong performances from the Boxer and Clothing businesses, and further progress in
the Pick n Pay turnaround plan, including advancement of its omni-channel offer. The Group opened 64 new stores this period across all formats, with a strong
store pipeline and capital plan for the remainder of the year.
Highlights from the period include:
- Above market sales performances from Boxer and Pick n Pay Value stores(3)
- Exemplary response to civil disorder and violence in July - rebuilding and re-opening damaged stores and distribution centres as rapidly as possible
- Better value for customers - internal selling price inflation restricted to 3.6% against CPI Food of 6.5%
- Strong sales growth from 24 modernised Select stores, introducing 300 new lines with focus on fresh, convenience and plant-based meal solutions
- Boxer own brand offer grew by 26% year-on-year, reaching a sales penetration of 28% in participating categories
- Progress in developing Pick n Pay's omni-channel proposition - asap! has delivered 200% growth in on-demand online sales since launch
- Pick n Pay Clothing extended market share gains, delivering 26% sales growth year-on-year(3)
- Smart Shopper recognised as the most used loyalty programme in South Africa, with Pick n Pay loyalty penetration close to 80% of sales
- Greater efficiency in supply chain delivered further improvements in underlying gross profit margin
- Project Future target met - on track to deliver R1 billion of cost savings over two years
- New Project Future target - to drive further modernisation and save R3 billion in costs over the next three financial years
- Growing store estate - with 64 new stores across all formats
- The Group's Feed the Nation campaign has raised over R150 million in hunger relief since inception and played a pivotal role in supporting the communities
affected by the recent civil unrest
The first half of FY22 was the Group's first reporting period under the leadership of new CEO, Pieter Boone. It was a period marked by unforeseen and
unprecedented disruptions. The underlying resilience of this financial result is testament to unprecedented teamwork across the Group. We thank and pay
tribute to all Boxer and Pick n Pay colleagues, and to our valued franchise partners, for their work under very difficult circumstances.
Looking beyond the disruption, the Group is encouraged by its progress in delivering a stronger and more compelling customer offer, and in particular by
progress in its Boxer, Clothing and Omni-channel offers. The Group recognises that there is further to go in the Pick n Pay turnaround. Its new Project
Future ambition to deliver an additional R3 billion of savings over the next three years from further modernisation and efficiency measures will be pivotal
in creating the headroom to drive innovation and even greater value for customers.
Gareth Ackerman Pieter Boone
Chairman Chief Executive Officer
19 October 2021
(1) Comparable profit before tax and comparable headline earnings per share exclude the full impact of hyperinflation accounting in Zimbabwe and all items of a
(2) Please refer to appendix 2 of the full interim results announcement for further information
(3) Measured against the formal grocery market using data sourced from StatsSA, and the formal apparel market using data sourced from the Retailer Liaison
Tax reference number: 9275/141/71/2
Number of ordinary shares in issue: 493 450 321
2022 interim dividend - number 107
Notice is hereby given that the directors have declared an interim gross dividend (number 107) relating to its 2022 interim financial period (26 weeks ended
29 August 2021) of 35.80 cents per share out of income reserves. The dividend declared is subject to dividend withholding tax at 20%. The tax payable is
7.16 cents per share, resulting in shareholders who are not exempt from dividends tax with a net dividend of 28.64 cents per share.
Last day to trade CUM-dividend Tuesday, 30 November 2021
Shares to commence trading EX-dividend Wednesday, 1 December 2021
Record date Friday, 3 December 2021
Dividend payment date Monday, 6 December 2021
Share certificates may not be dematerialised or rematerialised between Wednesday, 1 December 2021 and Friday, 3 December 2021, both dates inclusive.
On behalf of the Board of directors
19 October 2021
The Group will hold an online results presentation at 9:00am this morning. All interested stakeholders are invited to watch the webcast which can be
accessed using the following link: https://www.corpcam.com/PicknPay20102021. The slides accompanying the result presentation will be available on the
Pick n Pay Investor Relations website at www.picknpayinvestor.co.za shortly before the commencement of the presentation. A playback of the webcast will be
made available on our website approximately 2 hours after the presentation.
ABOUT PICK N PAY STORES LIMITED
The Pick n Pay Stores Limited Group is a leading South African grocery, clothing, liquor and general merchandise retailer, employing 90 000 people through
its owned and franchise operations, across its Pick n Pay and Boxer brands. The Group is managed through its South Africa and Rest of Africa divisions and
owns a 49% share of a Zimbabwean supermarket business, TM Supermarkets. For further information on Pick n Pay and its underlying businesses, please visit
DIRECTORS OF PICK N PAY STORES LIMITED
Pieter Boone (CEO), Lerena Olivier (CFO), Suzanne Ackerman-Berman, Jonathan Ackerman
Gareth Ackerman (Chairman), Aboubakar Jakoet, David Robins
Independent non-executive directors
Haroon Bhorat, Mariam Cassim, David Friedland, Hugh Herman, Audrey Mothupi, Annamarie van der Merwe, Jeff van Rooyen
101 Rosmead Avenue, Kenilworth, Cape Town 7708
Email address: PennyGerber@pnp.co.za
Investec Bank Limited
Computershare Investor Services Proprietary Limited
Date: 20-10-2021 07:05:00
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