RETAILING: Pick n Pay Earnings Sharply Down
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Pick n Pay said yesterday that in advance of releasing its 28 February year end results, it would share with the market that HEPS and diluted HEPS from continuing operations would be between 10% and 25% below the previous year. HEPS from continuing operations is the measure used by the company for an accurate reading of performance.
Total HEPS and total diluted HEPS (including Score and Franklins) would be between -15% and -30%, while EPS and diluted EPS from continuing operations as well as total EPS and total diluted EPS, all of which include the prior year profit on the sale of properties, would between -25% and -40%.
The Group exited the operations of Score Supermarkets in the previous financial year and is in the process of exiting from Franklins Australia, both of which are now disclosed as discontinued operations.
This drop is due in part to the fact that during the previous year ended 28 February 2010, the Group realised a capital profit on the sale of properties which is excluded from headline earnings and has a marked effect on the growth of earnings per share (EPS) relative to headline earnings per share.
In addition, trading conditions in the second half of the year were particularly tough due to the adverse effect of a national labour strike during its peak trading period and its after effects; cost inflation exceeding internal selling price inflation and the company’s continued investment in gross margin.
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