Johannesburg – Retailers Pick n Pay is holding onto about R850m in cash by not paying final dividend, warning that the disruptions caused by Covid-19 has disrupted trade in more profitable goods such as liquor and tobacco.
The retail group would have paid a final dividend of 173.06c a share for its year to end-March 1. The company said that while the trading outlook remained uncertain, SA’s economy was likely to contract significantly in 2020.
Pick n Pay said it had been unable to trade in key categories including liquor, tobacco and most clothing and general merchandise lines during SA’s lockdown. These are the categories that make up about 20% of the group’s revenue and also have high margins compared with basic food and grocery lines, said Pick n Pay.
They added that a robust trading performance in SA was offset by difficulties in some of its African operations, including Zimbabwe, where hyperinflation took a bite out of profits.
The group’s share price has fallen 15.15% so far in 2020, while the JSE all share has fallen just over 12%