JOHANNESBURG (Reuters) -South Africa’s Pick n Pay reported a wider half-year loss on Monday, reflecting trading losses in its core supermarkets business alongside higher borrowing costs.
The country’s third-biggest grocery retailer reported loss before tax and capital items of 1.1 billion rand ($62 million) in the 26 weeks to Aug. 25, compared to a loss of 837.2 million rand a year ago.
Trading losses in the group’s pick n pay business grew 9.1% to 718.9 million rand, largely due to gross profit margin contraction, it said.
However, clothing and online businesses saw “solid momentum,” with encouraging improvement in the underlying performance of its company-owned supermarkets, the retailer said.
CEO Sean Summers, who is tasked with turning around the struggling grocer, said the company is “quietly confident” that it will reduce trading losses in the pick n pay business by as much as 50% for the full year.
The group’s discount boxer business’ trading profit grew by 16% to 801.4 million rand, due to a 12% growth in sales.
Overall group turnover grew by 3.7% to 56.1 billion rand.
($1 = 17.7156 rand)
(Reporting by Nqobile Dludla; Editing by Himani Sarkar and Varun H K)
