South African retailer Pick n Pay has revealed it is looking at ways to enter Nigeria.
Pick n Pay said today (15 April) a group of executives were in Nigeria looking at ways to break into the country.
“We have installed a team on the ground in Nigeria to explore opportunities in that market,” the retailer said as it reported its financial results for the year to 2 March.
The company has a small business outside its domestic market and it has quit markets in the last 12 months.
Pick n Pay has closed its franchise businesses in Mauritius and Mozambique, which it described as “clear and decisive action”.
However, it said it had seen “good growth” in Zambia. Its sales outside South Africa were up 9.4%.
Pick n Pay reported higher annual turnover and earnings despite “subdued” like-for-like sales. Pre-tax profits were up 3% at ZAR830.9m (US$78.6m).
The company’s financial year comprised 364 days, versus 368 in the previous fiscal period.
Excluding that factor, pre-tax profits were up 17.6%. Headline earnings per share – a key reporting metric in South Africa – grew 43.5% to 68.83 cents.
Turnover climbed 7.7% to ZAR63.1bn in part due to a 2.7% increase in like-for-like sales.
However, Pick n Pay said new stores had given a boost to its top line as higher food and utility bills weighed on consumer spending.
The retailer also claimed its performance was getting closer to that of the market as a whole. “The gap between Pick n Pay’s growth and overall market growth narrowed from 2.5% in the previous year to 0.7% this year,” the company said.
“We are a stronger business than we were 12 months ago. We are better positioned to strengthen and grow our core South African business, and actively explore new strategic opportunities in the rest of Africa.”