Pick n Pay has published its annual financial results for the year ending 3 March 2019.

Despite a challenging trading environment, the company said that it saw market-leading sales performance with turnover up 7.1% (7.4% in South Africa).

Headline earnings per share grew 18.0%, with diluted HEPS up 18.8%. Profit before tax (PBT) was up 17.3%, with the PBT margin improving from 2.2% to 2.4%.

There was a total annual dividend of 231.10 cents per share, up 22.4%, which equated to over R1 billion for shareholders.

“In a challenging trading environment, the company has continued to deliver on the objectives set out in its long-term plan: a relentless focus on improving cost and operational effectiveness enabled the group to invest in a winning customer offer through lower prices, more attractive promotions, better and more innovative products, compelling value-added services, and brighter and more modern stores – without sacrificing earnings growth,” it said.

“Steps taken to reduce costs in 2018 enabled the company to invest decisively in the customer and outperform the market in FY2019.

“Across the year, the company reduced prices on thousands of products, particularly on fresh produce, meat, and commodities and delivered a sustained programme of fewer, deeper and more effective promotions. This produced exceptional value for customers, with internal selling price deflation of 0.3% against CPI food of 3.4%.”

“Successful execution of this plan was evident in the company’s market-leading turnover growth of 7.1%, and like-for-like turnover growth of 4.8%. The company’s core South Africa division – comprising Pick n Pay and Boxer – delivered turnover growth of 7.4%.”

Pick n Pay Store account

The retailer also noted that its Pick n Pay Store account now has 125,000 active customers – an increase of 25% year-on-year.

Launched in September 2017, the service enables customers to pay for their goods at a later date on a card with no joining fees and low-interest rates.

The account is accessed through the customer’s Smart Shopper card, with the credit provider carrying all associated funding costs and credit risk.

It offers the most affordable form of credit in the market, with a 55 days free credit payment option, no joining fee, no hidden administration fees and the lowest monthly fee in the market, the retailer said.

Pick n Pay said that customer feedback confirmed that customers are switching to the Pick n Pay card from other more expensive forms of credit, and many of its customers avoid all interest charges by paying off their accounts in full each month.