Pick n Pay halves dividend after R2.8bn Covid-19 sales hit
Retailer Pick n Pay has cut its half-year dividend by more than half, after Covid-19 restrictions and safety measures cost it an estimated R2.8bn in lost sales.
The group reported turnover rose 2.6% to R44.2bn in its six months to end-August, with trading restrictions affecting up to 20% its revenue at different stages of the nationwide lockdown.
Sales were further hit by reduced trading hours, limits on the number of customers in stores and temporary store closures, Pick n Pay said.
Profit after tax fell 59% to R158.7m, while the group cut its dividend 56% to 18.74c a share. Pick n Pay said it faced an additional R150m in operating costs directly due to Covid-19, while a voluntary severance programme cost a further R100m.
Core retail sales — including food, groceries and general merchandise, but excluding liquor, clothing and tobacco — grew 8.7% year on year, it said. Liquor and tobacco sales decreased 47.5% over the period, amid government restrictions on these products.
Online sales doubled over the period, with a 200% increase in active online customers.
“Notwithstanding unprecedented levels of demand, our online platform achieved product availability — order fulfilment rates — of 94% and on-time delivery rates of 98%,” the group said.
“Although the pandemic inevitably impacted our sales and profit, we have delivered a resilient result, with many reasons to be positive about the future,” said CEO Richard Brasher.
In morning trade Pick n Pay’s share price was up 3.55% to R53.37.
Update: October 20 2020
This article has been updated with share price information
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