Pick n Pay H1 HEPS from total ops seen 10-20% down

HEPS and diluted HEPS from continuing operations would decrease by between 30% and 40%‚ the company said.

Turnover growth for the period was 5.9% with like-for-like growth at 3.2%. The company said that although new store growth was still behind the market‚ store openings were weighted to the second half of the financial year and significant work was underway to strengthen the medium to longer term pipeline.

"Lower than expected turnover growth is the result of increased market competiveness‚ poor availability of merchandise from suppliers and continued economic pressure on our heartland customer‚" Pick n Pay said.

Initial operating difficulties were encountered at Longmeadow when taking over day to day management of the distribution centre‚ the group noted.

"Operational and cost improvements have been achieved since then. The financial implications of these difficulties plus contract termination costs have had a negative impact on the results‚" Pick n Pay said.

Furthermore‚ an investment had been made in developing internal skills and costs were incurred.

"The group is confident that while the short term impact is negative‚ investing in internal skills and accelerating these programmes will bear significant future benefits‚" it said.

Pick n Pay added that its category buying function was centralised during the current period‚ and some operational difficulties were encountered which had negatively affected margins and stock availability in the short term.

EBITDA from continuing operations is expected to decrease by between 10% and 20% for the period.

Pick n Pay's results will be released on 24 October.