Pick n Pay A sucking of teeth in the boardroom
Some of the more hatchet-faced analysts are less than amused by Pick n Pay’s results – turnover up a sketchy 5.9%, trading profit down 13.5% and headline earnings down 7%. Of equal concern is the old balance sheet: Pick n Pay’s shareholders’ equity (consisting, as you are aware, of assets minus liabilities) is R2.2bn, with R1.3bn of it tied up in Franklin’s, under threat of being sold off piecemeal for a lot less and, and the other R800million in the SA business, which is currently financing R950m of short-term and R600m long-term debt. Then there’s the trading margin, 2.7% before you factor in the ongoing costs of the Smart Shopper loyalty programme. All is not lost however. While Longmeadow is living up to its name in the time it’s taking to kick in, centralised distribution will inevitably start to deliver, ahem. As will the completion of the Sap rollout, Smart Shopper itself and various other initiatives. Fair enough. But what really stings the analyst is the heart-warming tradition, at a time like this, of paying an annual dividend.
Comment: Shareholders, eh. Can’t live with ‘em, can’t fire ‘em. More here from the excellent Sasha Planting.