Tough competition for Pick n Pay at upper end

declaring a 35.8c per share dividend, up 91% year on year, and representing a payout of about R176m.

However, Pick n Pay’s profit gain is skewed as it comes off a low base compared with the same period last year, which included one-off R200m restructuring costs and a R50m bonus to frontline staff.

Its gross profit margin declined from 19.6% to 18.2%, which it said was due to the riots in July. Its gross profit declined by 3.4% to R8.4bn.

Sasfin analyst Alec Abraham said Pick n Pay’s turnaround, which started under previous

CEO Richard Brasher, is working. Abraham said lower trading expenses, up 1.9%, excluding riot-related costs, and better use of working capital “are all testimony to the excellent work that Richard Brasher put in to fix the business”.

“It took a little longer than expected to start realising the benefits, but I believe we’ll continue to see benefits flow at least into the medium term.”

At close of trade on Wednesday, Pick n Pay’s shares were up 1.94% at R60.56.

They have risen 20.8% in 2021, but have fallen about 5% since the start of 2020.