September 20, 2018 / 11:34 AM / a month ago

South Africa's Pick n Pay sees jump in HY profits

JOHANNESBURG, Sept 20 (Reuters) - South African retailer Pick n Pay said on Thursday that it expects its half-year diluted headline earnings per share to increase by up to 85 percent largely due to cost savings from staff layoffs made last year.

The company’s shares rose more than 3 percent after it flagged that its diluted headline earnings per share for the 26 ended August would come in between 95.43 and 100.88 cents per share, compared with a restated 54.53 cents per share in 2017.

Headline earnings - South Africa’s most widely watched profit gauge - strip out certain one-off items.

Normalised headline earnings per share, which exclude the earnings impact of 200 million rand ($14 million) spent on once-off severance payments in the prior period, are seen increasing rising up to 20 percent to 102.69 cents per share.

The retailer cut approximately 3,500 jobs or 10 percent of its workforce in July last year in what it said were cost saving efforts in response to difficult trading conditions.

Pick n Pay flagged turnover growth at 6.4 percent despite constrained consumer spending.

Its shares traded 2.92 percent higher at 69.05 rand by 1127 GMT.

The company’s half-year results are due on Oct. 16. ($1 = 14.4864 rand) (Reporting by Patricia Aruo)

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