Pick n Pay sees operation earnings down 10%-20%

This compares to a 39.3% reduction in HEPS from continuing operations in the first half of the year.

The company said earnings per share (EPS) and diluted EPS from continuing operations would decrease by between 10% and 20%; and EPS and diluted EPS from total operations would increase by between 35% and 45%, due to the profit on the sale of Franklins.

The group completed the sale of Franklins in Australia on 30 September last year.

The net proceeds from the sale were R1.2 billion, resulting in a profit after tax of R438.4 million. The profit on the sale of Franklins is not included in headline earnings.

The retailer said that the operational results for the second half of the financial year had shown a marked improvement.

However, as reported with its interim results, the group said its continued investment in its strategy had a negative impact on profit growth for the year.

"The primary costs in this regard are the upfront launch costs of smart shopper, the implementation of specialist category buying and the continued investment in our central distribution system, all of which will improve future operating efficiencies and enhance our ability to serve our customers," Pick n Pay said.

Turnover growth for the year was 8.1% (8.7% for the 6 months ended 29 February 2012) with encouraging like for like growth.

EBITDA from continuing operations will decrease by up to 10%, it said.

Pick n Pay's results are due on 18 April.