Pick n Pay has a few diamonds in the rubble of its results

  • Pick n Pay’s unaudited financial results for the last financial year make for a grim read.
  • Trading profit was 87.4 percent lower than it was in 2023 representing a loss of R1.5 billion.
  • Deliveries are growing rapidly with On demand sales climbing 102.3 percent over the 52 weeks ending 25th February.

Disastrous is one word we could use to describe Pick n Pay and its unaudited financial results for the year ending 25th February 2024.

While turnover across the group was up 5.4 percent, trading profit declined a jaw-dropping 87.4 percent to R385 million a loss of R1.5 billion compared to 2023. The retailer cites flat sales at its stores, trading expense growth exceeding sales growth, and gross profit margin contraction.

“The result was further impacted by a 198.8% increase in net interest paid to R701.8 million, as a result of higher gearing and increased interest rates. The cumulative result of the above factors was a loss before tax and capital items of R1.4 billion. Additionally, the trading loss reported by the Pick n Pay business triggered a R2.8 billion non-cash impairment on the assets of Pick n Pay company-owned stores, which resulted in the Group reporting an overall after-tax loss for the period of R3.2 billion. Owing to the comparable loss declared for the period, the Board has not declared a FY24 dividend,” it told its shareholders.

However, despite these loses and rising debt, Pick n Pay appears hopeful and says newly installed chief executive officer Sean Summer is achieving “encouraging early results”.

However, to stem the tide, the retailer has to take action. As such, over 100 loss making supermarkets will either be closed or converted to franchise stores for Pick n Pay and Boxer. The group meanwhile will drive initiatives to drive sales while optimising the retailer’s operating model.

It’s not all doom and gloom though, there is one impressive development in these results – online sales.

Deliveries through Mr D and the newly revitalised asap! app saw online sales grow 74.4 percent. On demand sales meanwhile grew 102.3 percent which is very impressive. Deliveries are now offered at more than 500 locations so this growth makes sense and should have Shoprite Group quaking in its boots.

However, how long Shoprite will quake depends wholly on how Pick n Pay turns the ship around. In the first 12 weeks of the 2025 financial year, results are encouraging but, that’s barely scratching the surface.

There is clearly a plan but how long it will take to execute is the question that needs to be answered now. While growth in online sales and at Pick n Pay Clothing stores are encouraging, the retailer needs to focus on other areas of the business in order to keep shareholders happy

Part of that seems to be the recapitalisation plan and the forthcoming rights offer.

“The two-step recapitalisation plan is making good progress, with the rights offer to be imminently launched. Successful implementation of the two-step plan will see a sharp reduction of interest costs and generate resources to drive the Pick n Pay turnaround,” the group said.

Don’t count Pick n Pay out just yet then, while these results aren’t great, perhaps in 2025 we’ll be singing a different tune.


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