Pick n Pay posts surprisingly strong profit growth, in face of retrenchment costs
Despite its warnings that its staff reduction programme would cause headline earnings to fall, Pick n Pay posted an impressive 15% growth in after-tax profit and raised its interim dividend by 12%. The grocery chain did not say how many employees had accepted its voluntary separation programme, only that "the programme enabled 10% of roles and functions to be removed across Pick n Pay". "The net impact amounted to R200m, before tax, and has had an impact on employee costs under trading expenses. This cost is expected to be fully recovered by the end of the financial year through resulting savings in employee costs," Pick n Pay said in Tuesday’s interim results statement for the 26 weeks ended August 27. Pick n Pay grew its pretax profit by 14.6% to R605.2m and its after-tax profit by 15% to R438.8m. It raised its interim dividend by 12% to 33.4c from 29.9c. Diluted headline earnings per share (HEPS) grew 13% to 90.36c. The results said that including the retrenchments, diluted HEPS ...
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