Pick ‘n Pay, a leading South African supermarket chain partly owned by the billionaire Ackerman family, delivered a resilient financial result at the end of its 2023 fiscal year despite the crisis in the national electricity generation sector.
The company faced higher costs as it was forced to spend more on diesel for its generators due to load shedding in the country, but it still managed to post a total profit after tax of R1.169 billion ($64.1 million) at the end of its 2023 fiscal year, only 3.7-percent lower than the R1.214 billion ($66.3 million) profit it recorded in the previous year.
According to its recently published annual financial statements, Pick ‘n Pay also recorded an 8.9-percent surge in revenue from R97.9 billion ($5.36 billion) to R106.6 billion ($5.84 billion) for the same period.
Although the retailer’s total sales growth was 8.7 percent, the growth was mostly driven by its South Africa segment, which accounted for 96.4 percent of total sales.
The Ackerman family-led group delivered a total sales growth of 8.7 percent during the year, generating R102.7 billion ($5.62 billion) in revenue, with a like-for-like sales growth of 4.5 percent.
The company attributed the slight decline in profit to the impact of the surge in operating costs caused by the country’s frequent load shedding.
The impact of the electricity crisis forced Pick ‘n Pay to spend an incremental R522 million ($29 million) on diesel to run its generators, in addition to incurring planned costs to implement the Ekuseni plan.
Despite these challenges, the Ackerman family-led retailer was able to keep year-on-year trading expense growth to only 11.9 percent.
The decline in profit led to a final dividend of R1.403 ($0.0766) per share, bringing the total dividend for the year to R1.851 ($0.1013) per share, down 16.3 percent from the previous year. However, the group maintained a dividend cover of 1.3x pro forma earnings.
Pick ‘n Pay, which was founded in 1967 by Raymond Ackerman, operates more than 2,000 stores across eight African countries.
The Ackerman family, which is now represented by Raymond’s son Gareth Ackerman, owns a sizable 25.53-percent stake in the company, or 124,677,238 issued shares.