Pick n Pay’s financial performance showed that despite the group’s efforts to become more profitable, the worst is not over as the company posted a R827.4 million loss for the interim period of 26 weeks ending August 25, 2024.
According to its latest financial results, group turnover grew by 3.7% to R56.1 billion from R54.1 billion in 2023.
Pick n Pay supermarkets performed better in the first half of the financial year (FY) 2025, with like-for-like sales growth increasing to 3.1%, moving out of the negative territory recorded in the second half of FY of 2024, which was -0.5%.
Trading losses
The group noted that its financing costs were R1.13 billion for the year, and this resulted in a pre-tax loss of R1.05 billion, a further decline of 25.7% from 2023.
Pick n Pay said that it trading losses grew by 9.1%, in line with budgets, to R718.9 million, due to the financial year 2025 gross profit margin contraction.
“The group's comparable loss before tax and capital items grew 25.7% year-on-year to R1.1 billion, reflecting the trading losses in Pick n Pay alongside higher borrowing costs,” according to the statement.
Pick n Pay’s Chief Executive Officer (CEO) Sean Summers said they are quietly confident that they will reduce trading losses in the Pick n Pay segment by as much as 50% for the full-year.
Boxer IOP
The retailer is making progress in a number of key strategic and operational initiatives, including another formidable performance from its Boxer business, with its trading profit up 16% year-on-year.
Boxer recorded strong sales growth of 12.%, well balanced between like-for-like sales of + 7.7% and sales from new stores of +4.3%.
Summers said that the Boxer Initial Public Offering (IPO) remained pivotal to their strategy, and Boxer’s remarkable performance continued to prove it is an exceptional business.
“We are excited to see it thrive as a listed entity, and it will be one of the most exciting listings on the JSE in years,” he added.
Investing in better stores
Summers said that the leadership team is completely committed to the turnaround strategy hopes these positive changes will be reflected in Pick n Pay’s earnings.
“Our focus this year has been strengthening our balance sheet, as well as implementing the turnaround plan. Once our capital is in place, we can also start investing in refurbishing Pick n Pay stores and opening new ones,” he explained.
“Exactly a year ago, when I re-joined Pick n Pay, I forecast that this would be a multi-year journey and that it would get worse before getting better. Our earnings for the first half reflect this, and I am confident that the worst is behind us now,” Summers said.
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