South African retailer Pick n Pay has posted R296.8 million ($20.4 million) in profit in the first half of its 2021 financial year, as group headline earnings surged by 90.9 percent compared to last year.
Figures contained in the report revealed that profit after tax surged by 87 percent from R158.7 million ($10.92 million) in the first half of 2020 to R296.8 million ($$20.4 million), while revenue grew marginally by 4.1 percent from R46.0 billion ($3.1 billion) to R44.2 billion ($3.0 billion) during the period under review.
Despite the impressive growth in profit, the retailer’s financial performance was materially impacted by disruptions caused by civil unrest and liquor sales restrictions in South Africa.
These trading disruptions resulted in a loss of sales amounting to about R1.7 billion ($117.3 million), with a total of R930 million ($64.2 million) coming from civil unrest and R800 million ($55.2 million) as a result of liquor restrictions.
The strong double-digit growth in profit and headline earnings was driven by a growth in other income to R1.6 billion ($110.4 million), with the recognition of a R753.7-million ($52 million) insurance recovery in respect to losses suffered by the group due to the civil unrest.
Other income, excluding insurance recovery, rose by 6.3 percent to R808.3 million ($55.8 million).
The group’s half-year period ending on Aug. 31 was its first reporting period under the leadership of new CEO, Pieter Boone, who replaced Richard Brasher in February.
Boone noted that during the past six months that he has served as CEO, Pick n Pay and Boxer – alongside the entirety of South Africa – have navigated extraordinary and unforeseen challenges.
“The resilience demonstrated by this financial result is testament to unprecedented teamwork across the group, and to a continued focus in Pick n Pay and Boxer on delivering against strategic priorities,” he said.
Boone disclosed that – in a bid to increase its market share – the retailer’s Boxer chain will add another distribution center, while additional cost savings will be made through supply chain efficiencies and continued support office restructuring.
In line with the growth in comparable headline earnings per share, the group’s board of directors declared an interim dividend of R0.358 ($0.0248) per share payable on Dec. 6. This reflects an increase of 91 percent when compared to last year’s interim dividend distribution.
Pick n Pay is the second-largest supermarket chain in South Africa behind the retail behemoth Shoprite, and one of the leading retailers in Africa, with about 2,000 stores.
The behemoth is led by the affluent Ackerman family, which plays a vital role in the business.
Members of the family include Raymond Ackerman, who founded the retailer in 1967, and Gareth Ackerman, the chairman of the group.