Harare – JSE- Listed Pick n Pay Stores, which has partnered TM Supermarkets Zimbabwe to come up with TM Pick n Pay says earnings from the rest of Africa fell 16.2 percent due to the once- off impact of currency devaluation in Zimbabwe and difficult economic conditions in Zambia.
Having an exposure in Zimbabwe which recently changed its functional currency after separating bank accounts between nostro and RTGS FCA in October of 2018, Pick n Pay was compelled by IAS 21 to discount for foreign exchange gains or losses between the USD and the now functional currency known as RTGS$.
The currency although unofficially floated as at October, was already subjected to parallel market discounts which Pick n Pay together with other non Zim registered entities such as Old Mutual Limited which has Zim exposure, had to discount for.
Interestingly Zim domiciled companies were subjected to superior jurisdictional dictates, dictated by the authorities through statutory instrument 33 of 2019 which held all RTGS$s balances to be at par with the USD, thus attracting an adverse opinion from Auditors, whose primary guidance is the accounting standards.
Elsewhere, in its final results to the 53 weeks ended March 3, 2019 the Group said net profit rose by about a fifth in the financial year to March 3, even as its operations outside SA stumbled.
The improved performance, the Group said is anchored by strong performances from its stores serving the growing lower to middle income communities of SA, a more competitive price position and a substantively improved fresh offer.
Profit after tax was R1.65bn in the 53-week period, versus R1.3bn in the prior 52-weeks. On a pro-forma basis, net profit was up 19.9 percent as turnover grew 7.1 percent and margins improved.
A final dividend of 192c a share brings the total annual dividend to 231.1c per share, a 22.4 percent increase.
The group, led by former Tesco UK boss Richard Brasher since 2013, said the performance of the SA business – which trades under the Pick n Pay and Boxer brands – “mitigated some operating challenges experienced outside its borders”.
In its home market, turnover grew 7.4 percent and profit before tax was up 23.8 percent.
Thanks in part to promotions, Pick n Pay said selling prices were reduced by 0.3 percent in the year, while group-wide volume growth of 5.1 percent “represented its strongest underlying trading performance for many years”.
“Market-leading turnover growth was achieved without sacrificing earnings growth,” it said.
The group added 110 net new stores in the period, while 103 stores were refurbished.
Value-added-services income, including from the group’s partnership with TymeBank, was up 41.5 percent.
Meanwhile, Pick n Pay said it had started building a store in Nigeria, which would open in 2019, and it planned to open two more in that market.
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