| Tue 4 Oct 2011, 17:45 | | PWK/PIK - Pick n Pay Holdings / Pick n Pay Stores - Trading statement |
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PWK PIK
PWK PIK
PWK/PIK - Pick n Pay Holdings / Pick n Pay Stores - Trading statement
Pick n Pay Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1981/009610/06)
Share code: PWK ISIN code: ZAE000005724
Pick n Pay Stores Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1968/008034/06)
Share Code: PIK ISIN code: ZAE000005443
Trading statement
Shareholders are advised that Pick n Pay Holdings Limited and Pick n Pay Stores
Limited ("the Group") are in the process of finalising their results for the six
months ended 31 August 2011, which are expected to be published on or about 19
October 2011.
As the Group completed the sale of Franklins Australia ("Franklins") on 30
September 2011 it continues to be disclosed as a discontinued operation. The
net proceeds from the sale were approximately R1.3 billion, which will be
invested in the Group`s South African operations. The transaction will only be
accounted for in the second half of the financial year. Notwithstanding our
decision to complete the sale, the ACCC`s appeal has been expedited with a three
day hearing scheduled to begin on 24 October 2011. Our confidence in a
successful outcome has been boosted by the comprehensive judgment in our favour
in the Federal Court in late August 2011and by the court`s denial of the ACCC`s
application for an interim injunction.
Turnover growth for the six month period at 7.4% is encouraging given the
continued tough economic conditions, dominated by low inflation and a highly
competitive trading environment. We attribute the increased turnover growth to a
number of factors, one of the most influential of which is the introduction of
our smart shopper loyalty programme launched in March 2011, which now has over 4
million customers.
To accelerate its transformation into a globally competitive retailer, the Group
has continued to invest significantly in its transformation strategy. This
investment has had a material profit impact in the current six month period.
Main contributors to this are the upfront launch costs of smart shopper, the
planning for a specialist category buying organisation and the continuous
investment in an efficient centralised distribution system, all of which will
greatly improve our ability to serve our customers.
Given this high level of investment, we expect the results for the six months to
31 August 2011 to be lower than the corresponding period last year in the
following ranges:
* EBITDA from continuing operations (excluding Franklins), between -10% and -
20%.
* Continuing operations (excluding Franklins); HEPS, EPS, diluted HEPS and
diluted EPS between, -35% and -45%.
* Total operations (including Franklins); HEPS, EPS, diluted HEPS and diluted
EPS between, -40% and -50%.
This trading statement has not been reviewed or reported on by the Group`s
auditors.
Below find attached a communication to our customers.
By order of the board
Cape Town
4 October 2011
Dear Pick n Pay customer
Today we`ve released an update on our trading for the last six months. The
first thing we`d like to do is say a big thank you for shopping at Pick n Pay
and for your loyalty to our company. We are delighted with our improved sales,
which clearly show that over the past six months, more of you are shopping with
us, more often than ever before. Again, a very big thank you to all of you.
One of the things you`ll notice is the very high level of investment we`ve
made - and continue to make - to improve things for you at Pick n Pay. In fact,
over the last six months alone, we`ve invested over R250-million.
We`d like to share with you what`s happening in our business, the investments
we`re making and how this will improve your shopping experience at Pick n Pay.
Rewarding yourself for shopping with us
We`re the first grocery chain to offer you rewards and cash back every time you
shop with us. Our smart shopper programme was launched in March and we now have
over four million cardholders! While this has been a very large investment on
our part, we think it`s worth it. These customers are now reaping the benefits
of using their card, and even sharing their smart shopper points with charities.
The future plans for smart shopper are very exciting so watch this space!
More stores, more convenience
We`re opening more stores which are more conveniently located closer to you,
so it`s easier for you to get what you want, when you want it. This year we will
have opened 100 new stores across the country, including our clothing, liquor
and our Boxer stores.
Fresher produce, better availability
We`ve invested a great deal into our supply chain and technology systems,
which will help us get fresher product to you with much better availability.
This will make us more efficient and responsive, which will keep our costs
down so that we can keep our prices low.
Better range, better choice
We`ve invested in building a specialist category buying function. This means
that expert product specialists are now developing product offerings which
will give you better choice than ever before.
Making shopping even easier
We`re striving to improve everything from service at the tills to better
availability, and our full attention is still on providing you fantastic
products at low prices, in great stores where you find it a pleasure to shop.
That means our dedication to you is aimed at making sure that all your needs
are satisfied. Please talk to us about your suggestions, queries or concerns
at customercare@pnp.co.za or through our Customer Careline on 0800 11 22 88.
Shopping sustainably
We`re doing great things on the sustainability front and we`re helping you
to live sustainably too. We are consistently recognized as one of South
Africa`s greenest companies. Some of the initiatives we`ve put in place
include reducing energy consumption, reducing water usage and responsible
waste disposal - in fact we`re aiming for zero waste to landfill. Our stores
have recycling centres that accept used batteries, spent light bulbs, used
ink-cartridges and plastics bags for safe disposal.
But that`s not all. We encourage natural farming methods from our suppliers and
have a superb organics range. We`re closely involved with sustainable fisheries
through the World Wildlife Fund and have committed to providing you with only
certified sustainable seafood products by the end of 2015.
Feeling good about where you shop
We understand that our company has been built by South Africans and for 44 years
we`ve made a huge contribution to our communities. This year, despite a tough
economy, we`ve committed over R55-million to community development. The Ackerman
/ Pick n Pay foundation contributes substantially to economic development, with
programmes connecting small scale farmers and small business owners to Pick n
Pay Group stores. So, when you buy products like freshly baked local bread and
sustainably harvested fynbos and flowers, you`re assisting your communities.
We`ve always believed that doing good is good business and that will never
change, because that`s really what we`re all about.
Looking forward to the future
For over 40 years we`ve been improving your day-to-day shopping
experience through lower prices, better selections, fresh food,
convenient stores and value-added offerings as well as through community
and nation building. We now have over 700 stores throughout South Africa,
employing almost 50,000 people, and processing over 50 million consumer
transactions every single month. We share countless mealtimes, bath-times
and family times as an integral part of the lives of ordinary South Africans.
In all the ways that matter, we`re always there for you.
Thanks again for all your support.
Nick Badminton
Chief Executive Officer
4 October 2011
Sponsor: Investec Bank Limited
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