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GROCERY chain Pick n Pay hiked its interim dividend 23.6 percent to 29.9c in its results for the 26 weeks to August 28 released yesterday morning.

Interim revenue grew 7.4 percent to R38.3bn, of which 96 percent came from its domestic market and only four percent from its rest of Africa division.

Slow sales growth was blamed on both a tough trading environment and disruption caused by its store-refurbishment programme.

The group refurbished 35 stores in the 26 weeks, including 19 Pick n Pay and Boxer supermarkets and six local stores.

“This is almost triple the number of stores refurbished in the prior period. The group completed the refurbishment of its Boksburg Hypermarket during the year, and is encouraged by its subsequent strong turnover growth,” said CEO Richard Brasher.

After-tax profit growth of 18.4 percent to R381.8m outpaced revenue growth thanks to “further efficiency gains and cost savings across its procurement and supply chain channel”.

“Growth in like-for-like trading expenses was restricted to 3.8 percent, against CPI for the period of 6.1 percent, notwithstanding high regulatory increases in electricity, rates and other utilities,” the results statement said.

Pick n Pay Online turnover rose 33.7 percent year on year, with particularly strong growth in the Western Cape which benefits from a dedicated online warehouse, at the Brackenfell Hypermarket.

Pick in Pay hopes to replicate this in Johannesburg by developing an online warehouse in Isando. Much of the group’s expansion appears to be through smaller, franchised owned stores. It opened nine Pick n Pay Local stores and 23 Express stores during the reporting period.

“Our first spaza-to-store pilot project in Soweto has been well received in the community and is trading successfully. The group is developing four more sites in Gauteng, all of which will open by the end of the year,” Brasher said.

The group opened seven new supermarkets outside SA during the period: three in Namibia, three in Zambia and one in Zimbabwe.

“The weaker performance of the rest of Africa division reflects the difficult trading environment in Zambia.

“However, the group remains confident of the long-term prospects of the region and it plans to open three new stores in Zambia in the remainder of the year,” Brasher said. — Wires