By Bruce Ndlovu
South Africa’s Pick ‘n’ Pay has announced that its share of profit from its Zimbabwean associate partner TM Supermarkets declined by 6,3 percent in year end to March, attributing it to the currency and fiscal adjustments that the country went through over the course of the year.
Pick ‘n’ Pay, which boasts a 49 percent stake in TM Supermarkets, announced the downturn in profits from its Zimbabwean partner in its financial results for the year ending 23 March 2019.
The decline followed last year’s results which saw TM Supermarkets acknowledged as the outstanding performer in Pick ‘n’ Pay’s Rest of Africa segment as its trading momentum saw it delivering strong double-digit growth in Zimbabwe.
TM has 57 stores in the region, with 20 trading under the Pick ‘n’ Pay banner. Besides Zimbabwe, Pick ‘n’ Pay has interests in Botswana, Lesotho, Eswatini and Zambia.
Despite a strong performance in South Africa which saw the Group achieve turnover growth of almost 10 percent in the financial year to the end of March, Pick ‘n’ Pay said the struggles of its Zimbabwean and Zambian divisions had pegged it back.
“Group performance anchored by a strong result from the core South Africa division, with turnover growth of 7,4 percent (5,2 percent like-for-like) and profit before tax up 23,8 percent. The South Africa performance mitigated some operating challenges experienced outside its borders.
“Earnings from the Rest of Africa division (are) down 16,2 percent year-on-year, reflecting difficult economic conditions in Zambia and the once-off impact of currency devaluation in Zimbabwe,” the Group said.
The retail giant pointed to the accolades it won in Zimbabwe last year said despite the setbacks it suffered, its business was overall still on track.
“Pick ‘n’ Pay stores remained open throughout the year, and traded successfully despite external difficulties. Hard work in building customer and supplier loyalty stood the business in good stead, and its in-stock position remained high.
“The estate was improved with a further seven renovations in the year. TM received a number of retail awards in Zimbabwe, including being recognised as the “Coolest Supermarket Brand” at the Generation Next Awards and the Marketers Association of Zimbabwe’s (MAZ) “Superbrand of the Year” in the retail supermarkets sector.
“TM delivered double digit volume and customer growth, with cost discipline and operating efficiency supporting solid earnings growth.
“However, the Group’s share of associate income was down 6,3 percent year-on-year, with the impact of a R42,1 million foreign exchange loss on TM’s adoption of the newly recognised RTGS dollars as its functional currency, and a revaluation of relevant balance sheet items effective,” the company said.
Pick ‘n’ Pay chief executive officer Mr Richard Brasher said despite the difficult year in Zimbabwe and Zambia, the group was still looking to expand in the countries and other territories around Africa. Sunday News