Pick n Pay's share price jumped by almost 3% on Tuesday morning after the company reported a 14.5% increase in its headline profit per share, despite a year marked by the July riots, Russia’s Ukraine invasion, flooding in KwaZulu-Natal and load shedding.
For the year, the group's turnover increased by 5.2%, which accelerated by 7.4% in the fourth quarter following a recovery from the civil unrest in KwaZulu-Natal and Gauteng in 2021.
The unrest cost Pick n Pay R2.7 billion in lost sales. Pick n Pay has recovered R958.7 million in unrest-related material damage losses from Sasria and has received R145.2 million in interim business interruption payouts in March.
The group’s gross profit margin fell from 19.8% in 2021 to 18.8% as it kept its selling prices below inflation.
"Gross profit [margin] at 18.8% reflects the group's commitment to better value for customers, with selling price inflation contained at 2.9% for the year, against CPI food inflation of 6.2%," said Pick n Pay.
The retailer flagged cost pressures as a challenge going forward.
"These [pressures] are already evident in the operating environment, and reflect both international factors - in particular the invasion of Ukraine and its consequences - and local factors, including higher insurance and security costs following the civil unrest, and costs required to mitigate the impact of load shedding," the retailer said.
A final dividend of 185.35 cents per share was declared, resulting in a total dividend of 221.15c per share, up 23% from the previous year.
Pick n Pay's share price was up 2.8% to R59.35 by mid-morning on Tuesday, while the JSE's All-Share Index was up 1.3%.