South African retailer Pick n Pay has reported an expected fall in its half-year profits despite a jump in sales.
The company, which last month issued a profit warning for the first half of its financial year, today (19 October) reiterated that the fall in earnings was due to investment into its Smart Shopper loyalty programme and its supply chain.
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Headline earnings per share nearly halved to ZAR0.54 from ZAR0.90 last year.
EBITDA decreased 17.8% to ZAR882.4m (US$110m) for the six months ending 31 August.
However, turnover rose to ZAR27.1bn, compared to ZAR25.2bn last year.
Pick n Pay said the turnover growth was “encouraging” and insisted the investment it was making in its business would allow it to become a “world-class retailer”.
“These initiatives will enable us to better serve our customers in the future”, it said.
The retailer recently sold its Australian wholesale subsidiary Franklins to rival Metcash in an A$215m (US$203.9m) deal.
In July, Pick n Pay announced revealed plans to make more than 3,000 staff redundant.
