Pick 'n Pay to keep its holding structure
June 2, 2003
By Vera von Lieres
Cape Town - Pick 'n Pay, the food, clothing and general merchandise retailer, would in the future maintain its holding (or pyramid) structure through Pick 'n Pay Holdings (Pikwik), group finance director Dennis Cope confirmed on Friday.
Pick 'n Pay, founded in 1967, is a family-controlled business that has been listed on the JSE Securities Exchange since 1968 as Pick 'n Pay Stores.
Pikwik is the company through which the Ackerman family holds its controlling interest in Pick 'n Pay Stores.
Going forward, the JSE Securities Exchange would no longer allow any form of pyramid structure, but would leave existing ones in place, Cope clarified.
"Pick 'n Pay will do absolutely nothing in terms of unbundling that structure. Our chairman [Raymond Ackerman] has in the past been very vocal about the issue."
Head of the JSE's listing department, John Burke, could not be reached for comment.
Cope said for Pick 'n Pay the pyramid structure, which ensured ownership and control by the Ackerman family, worked because of the company's culture and management style.
Ackerman has in the past expressed strong feelings about maintaining family-controlled businesses in South Africa.
Internationally, pyramid structures as well as N share structures are not tolerated.
In the latest group annual report, Ackerman said the bedding down of the group's recently acquired Franklins operations in Australia was one of the main challenges ahead in the new financial year
.
Another was the opening of 95 stores across all group formats, complementing the existing 548 stores in five countries.
Reflecting on the past financial year, chief executive Sean Summers said the main challenges of the retail division in the past financial year were the dramatic rise in inflation and the ongoing battle against rising prices.
Pick 'n Pay was the first among food retailers to announce a series of food subsidies on meat, maize and other basic items, he noted.
"Looking at the 2004 financial year, we see this fight against inflation continuing as the cost of imported merchandise reduces cash resources on the stronger rand."
Inflation in South Africa remained one of the key issues of the day. While Pick 'n Pay aimed to bring down the price of basic foodstuff, for the bulk of packaged goods the reality was that inflation continued - albeit it at lower levels than last year.
In recent full-year results to February, the food retailer matched market expectations by delivering a 39 percent rise in turnover to R26.1 billion - the first set of annual results to include the effects of the Franklins acquisition.
Pick 'n Pay Stores closed 10c higher at R13.50 on Friday.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
