{"id":773848,"date":"2024-05-27T08:34:10","date_gmt":"2024-05-27T06:34:10","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=773848"},"modified":"2024-05-27T08:36:07","modified_gmt":"2024-05-27T06:36:07","slug":"massive-loss-for-pick-n-pay","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/773848\/massive-loss-for-pick-n-pay\/","title":{"rendered":"Massive loss for Pick n Pay"},"content":{"rendered":"\n

Pick n Pay has delivered a R3 billion loss for the year ended 25 February 2024 (FY24), primarily due to the poor performance of its Pick n Pay grocery stores. <\/p>\n\n\n\n

The group said that this poor performance undermined the strong performance of the Boxer business. <\/p>\n\n\n\n

The result was also impacted by increased interest charges due to increased gearing and a R2.8 billion non-cash store asset impairment in the group’s Pick n Pay grocery business.<\/p>\n\n\n\n

However, group turnover did jump by 5.4%, driven by strong growth from Boxer (17.3%) and Pick n Pay Clothing standalone stores (17.0%). <\/p>\n\n\n\n

However, gross profit margin declined by 1.5% to 18.1%, while gross profit in Rand terms declined 3.1% year-on-year.

Trading profit declined by 87.4% to R385 million, highlighting Pick n Pay grocery’s R1.5 billion trading loss (FY23: R1.3 billion profit) and Boxer’s R1.9 billion trading profit (FY23: R1.8 billion profit).

“The Pick n Pay trading loss was primarily driven by flat (+0.3%) Pick n Pay sales, trading expense growth exceeding sales growth, and gross profit margin contraction in that business,” said the group.

“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. “<\/p>\n\n\n\n

The cumulative result was a loss before tax and capital items of R1.4 billion. Moreover, the Pick n Pay grocery business triggered a R2.8 billion non-cash impairment on the assets of Pick n Pay company-owned stores, resulting in an overall after-tax loss of R3.2 billion for the period. <\/p>\n\n\n\n

With this in mind, the group did not declare a dividend for the financial year. <\/p>\n\n\n\n

Financials<\/strong><\/td>FY23<\/strong><\/td>FY24<\/strong><\/td>Change<\/strong><\/td><\/tr>
Group turnover<\/td>R106.6 billion<\/td>R112.3 billion<\/td>5.4%<\/td><\/tr>
Trading profit<\/td>R3 048.0 million<\/td>R385.0 million<\/td>-87.4%<\/td><\/tr>
(Loss) \/ profit after tax<\/mark><\/strong><\/td>R1 169.9 million<\/mark><\/strong><\/td>-R3 190.1 million<\/mark><\/strong><\/td>-372.7%<\/mark><\/strong><\/td><\/tr>
Basic (loss) \/ earnings per share <\/td>243.37 cents<\/td>-661.67 cents<\/td>-371.9%<\/td><\/tr>
Headline (loss) \/ earnings per share<\/td>259.25 cents<\/td>-203.06 cents<\/td>-178.3 %<\/td><\/tr>
Total dividend per share<\/td>185.15 cents<\/td>0.00 cents<\/td>–<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

Plan ahead <\/strong><\/p>\n\n\n\n

The poor performance of the group resulted in net debt increasing to R6.1 billion at year-end (FY23: R3.7 billion).<\/p>\n\n\n\n

The group, however, plans a two-step equity capital raise plan to recapitalise the group to pay off debt. <\/p>\n\n\n\n

This includes a rights offer in the middle of the year, in which the Ackerman family will forego their majority shareholder voting control of Pick n Pay.<\/p>\n\n\n\n

Moreover, the group plans to list Boxer on the JSE by the end of this year. <\/p>\n\n\n\n

The group is also resetting its store estate to minimise losses, where some Pick n Pay stores will be converted to Boxers, where customer demand and demographics call for it. <\/p>\n\n\n\n

“Multi-year loss-making stores that are unsuitable for conversion to franchise or Boxer will be closed,” said the group. <\/p>\n\n\n

\n
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Source: Pick n Pay<\/figcaption><\/figure><\/div>\n\n\n
\n\n\n\n

Read<\/strong>: South Africa\u2019s economy grew slower than Zimbabwe \u2013 but Ramaphosa celebrated it<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Pick n Pay has recorded a substantial loss in the latest financial year – and the group’s founding family is letting go of the reins.<\/p>\n","protected":false},"author":95,"featured_media":716710,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-773848","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773848","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=773848"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773848\/revisions"}],"predecessor-version":[{"id":773864,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773848\/revisions\/773864"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/716710"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=773848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=773848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=773848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}