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Pick n Pay’s earnings exceed market forecasts

| Retailer trading results

Pick n Pay has delivered a 28% rise in full-year headline earnings per share to 177.26c, topping market forecasts.

The retailer said on Tuesday that financial rigour over capital and operating spend, combined with strengthening the business for the long term, had driven headline earnings.

The company is in the midst of a turnaround strategy‚ having lost market share to rivals over the past few years.

Group turnover in the year to March was up 6.1% to R66.9bn, reflecting "financial pressure on middle-income customers, combined with the impact of strategic actions".

Pick n Pay closed 26 underperforming stores in 2014 and a further 14 in 2015. Trade was also disrupted as four hypermarkets and 16 supermarkets underwent refurbishment in the second half of the financial year.

Net profit was up 47.6% to R861.7m while the final dividend of 98.50c per share was declared, bringing the total annual dividend to 118.10c per share.

The company said improvements in cost control and underlying efficiency had been at the forefront of the first stage of its plan.

"These provide a solid foundation for the second stage, in which a leaner, more efficient business will create more value to invest in the customer proposition"

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