Two big steps forward for Pick n Pay
With the listing of Boxer, Pick n Pay has now finished its two-step recapitalization plan.
The group said that the plan’s finalisation will help restore the performance of Pick n Pay supermarkets and position the group for long-term sustainable growth.
The first part of the recapitalisation plan was the Pick n Pay Rights offer, which was more than double oversubscribed, and raised R4.0 billion in August 2024.
The second step was Boxer’s listing on the JSE on Thursday (28 November). Boxer shares worth R8.5 billion were placed at R54 and were multiple times oversubscribed at the very top end of the price range.
The share price started strongly, with 4.4 million shares selling for roughly R63.00 in the opening trade.
With a share price of around R63, Boxer’s market cap is roughly R28.8 billion – more than Pick n Pay’s R22 billion and SPAR’s R25.97 billion.
These results reflect shareholder confidence in the group’s strategy and future potential.
The capital raised enables Pick n Pay to repay all of its long-term debt and to convert interest costs to interest earnings.
The business will also hold cash reserves critical for its turnaround, including investment into new stores and store refurbishments, product range development, technology upgrades, and staff training.
The strong shareholder support allowed Pick n Pay to retain over 60% of Boxer.
“Successfully concluding our Recapitalisation Plan in such a short space of time is an extraordinary milestone for Pick n Pay,” said Pick n Pay CEO Sean Summers.
“The outcome reflects not only the individual strength of the Pick n Pay and Boxer brands but also the shared belief of our shareholders in our ability to deliver on our strategic goals.”
The group did, however, stress that the ongoing turnaround of Pick n Pay remains a multi-faceted and multi-year strategy.
Under its new leadership team, the group has already enhanced its product range and improved its customer services, all of which have led to early improvements in the underlying performance of the core Pick n Pay business.
Need the cash
The two-step recapitalisation follows a challenging period for the group.
In its most recent full-year results for the year that ended 25 February 2024, net profit dropped by 373% as it swung from a R1.17 billion profit in the prior year to a R3.2 billion net loss.
Pick n Pay had even become technically insolvent for the first time in its listed history—a position it has now reversed.
The company’s net debt-to-EBITDA jumped from 1.1 to 6.3 times, and the group breached all its debt covenants.
The group’s results were again poor in the interim period that ended 25 August 2024, with the group’s posting a R827.4 million loss – a 45% drop from the same period a year prior.
Summers warned that the group’s financial performance and results would continue to get worse before they got better, with the latest results reflecting that.
That said, Summers said that the worst is behind the group as its business plan already showed improvements in Q2 versus Q1 of its 2025 financial year.
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