JOHANNESBURG (Reuters) -South African grocery retailer Pick n Pay on Thursday forecast a wider half-year headline loss, but said it expects its full-year result before tax and capital items to show a meaningful improvement on the prior year.
The company did not indicate whether it expected a profit or a loss for the full year.
In the 26 weeks to Aug. 25, the country’s third biggest grocery retailer said it expects its comparable headline loss of between 142.84 cents and 131.85 cents per share, compared with an adjusted loss of 109.88 cents in the prior year.
Pick n Pay said its full-year performance will be supported by trading profit growth at its discount grocery chain Boxer and expectations of a much-reduced trading loss at its Pick n Pay supermarkets business.
A reduction in interest charges in the second half, thanks to its recapitalisation, will also support its full year performance, the retailer added.
Group sales for the period increased by 3.7%, with Pick n Pay sales, including grocery and clothing, down 0.3% due to the closure of 24 supermarkets. On a like-for-like basis, Pick n Pay sales inched up 0.5%, with South Africa sales marginally up 0.1%.
Sales of the discount grocery business Boxer, which Pick n Pay is aiming to list on the bourse by the end of the year, grew 12% driven by strong like-for-like sales, complemented by new store openings, the retailer said.
Pick n Pay is in the middle of a turnaround and two-step recapitalisation plan aimed at turning the core Pick n Pay supermarket business profitable after losing market share to bigger rivals Shoprite and others for more than a decade.
Pick n Pay said it is starting to see early progress in the turnaround of Pick n Pay company-owned supermarkets in South Africa, with steady improvement in like-for-like sales growth, its key turnaround indicator.
(Reporting by Nqobile Dludla; Editing by Leslie Adler)
