{"id":841236,"date":"2025-10-29T07:00:00","date_gmt":"2025-10-29T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=841236"},"modified":"2025-10-28T16:44:42","modified_gmt":"2025-10-28T14:44:42","slug":"get-pick-n-pay-for-free","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/841236\/get-pick-n-pay-for-free\/","title":{"rendered":"Get Pick n Pay for free"},"content":{"rendered":"\n

Pick n Pay\u2019s market cap is lower than the value of its 65.6% stake in Boxer, which means investors essentially get Pick n Pay Stores for free if it invests in the company.<\/p>\n\n\n\n

On Monday, 27 October 2025, Pick n Pay released its interim results for the 26 weeks ended 31 August 2025.<\/p>\n\n\n\n

On a group level, the company saw its turnover grow by 4.9% to R58.8 billion and its trading profit improve by 273.5% to R310 million.<\/p>\n\n\n\n

However, this was primarily driven by Boxer\u2019s standout performance. It grew turnover by nearly 14% to R22.52 billion and its trading profit by over 16% to R931 million.<\/p>\n\n\n\n

In contrast, the company\u2019s core brand, Pick n Pay, proved to be a drag on the company\u2019s latest interim results.<\/p>\n\n\n\n

This segment reported that its turnover remained essentially flat at R36.3 billion and it recorded a trading loss of R621 million.<\/p>\n\n\n\n

However, it is not all bad. This loss is a 13.5% improvement from the first half of the company\u2019s 2025 financial year.<\/p>\n\n\n\n

The retailer attributed its loss to a reduction in store estate, which declined by 59 supermarkets over the 26-week period.<\/p>\n\n\n\n

Investors were not impressed by the retailer\u2019s results, and Pick n Pay\u2019s share price plummeted after the results were released.<\/p>\n\n\n\n

Pick n Pay stores\u2019 revenue remained virtually unchanged. Its revenue increased by only 0.06% from the previous interim period, growing from R36.29 billion to R36.30 billion.<\/p>\n\n\n\n

This means Pick n Pay stores are not increasing their market share and seeing no real growth in revenue.<\/p>\n\n\n\n

Pick n Pay South Africa, for instance, has seen its revenue on a downward trend, reporting a 0.4% decrease in revenue compared to the previous period.<\/p>\n\n\n\n

Analyst opinion about Pick n Pay<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Jonathan Fisher from PSG Wealth Sandton highlighted that Pick’n Pay\u2019s financial results look good on the face of it.<\/p>\n\n\n\n

However, when you delve deeper into the numbers, the performance of Pick n Pay as a standalone business does not look great.<\/p>\n\n\n\n

\u201cIf you consider the trading profit, which increased by 273% to R310 million, Boxer contributed R931 million. Pick n Pay had a trading loss of R601 million,\u201d he said.<\/p>\n\n\n\n

He said Pick n Pay is still making losses. It reduced these losses somewhat, but not to the extent which management would like.<\/p>\n\n\n\n

Another challenge is that the sales growth of the company-owned stores is lower than the like-for-like operating cost growth.<\/p>\n\n\n\n

Fisher predicted that it would take a fair amount of time for Pick n Pay to return to profitability, which may concern many investors.<\/p>\n\n\n\n

Grant Nader from Benguela Global Fund Managers agreed with Fisher, saying there are no clear signs that Pick n Pay\u2019s turnaround strategy is working yet.<\/p>\n\n\n\n

\u201cThey are doing the right things. The losses are decreasing and the retailer is sustaining some kind of margin,\u201d he said.<\/p>\n\n\n\n

This is partly driven by the strategy to close many loss-making company-owned and franchise supermarkets.<\/p>\n\n\n\n

Pick n Pay\u2019s shrinking store estate means that it has lost market share. However, this is now stabilising as the strategy to close stores is over.<\/p>\n\n\n\n

Nader added that Boxer and Pick n Pay Clothing are shining lights, which bodes well for the retailer\u2019s growth.<\/p>\n\n\n\n

However, he does not like the core business model and does not see the turnaround strategy playing out yet.<\/p>\n\n\n\n

Pick n Pay\u2019s market cap<\/h2>\n\n\n\n

An interesting situation is that investors basically get Pick n Pay for free when they buy shares in the company.<\/p>\n\n\n\n

Boxer, which is now a separately listed entity 65.6% owned by Pick n Pay, is the shining light in the group\u2019s portfolio.<\/p>\n\n\n\n

Pick n Pay\u2019s 65.6% shareholding in Boxer has a market value of R23.4 billion, while the Pick n Pay Group’s market cap is only R22.2 billion.<\/p>\n\n\n\n

This means that shareholders discounted Pick n Pay stores to less than zero, to a value of -R1.3 billion.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

Pick n Pay\u2019s market cap is lower than the value of its 65.6% stake in Boxer, which means investors essentially get Pick n Pay Stores for free if it invests in the company.<\/p>\n","protected":false},"author":10,"featured_media":825578,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[12777,6655,22485,23945,4067,23944,16590,11232,19960],"class_list":["post-841236","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-benguela-global-fund-managers","tag-boxer","tag-grant-nader","tag-jonathan-fisher","tag-pick-n-pay","tag-pick-n-pay-sa","tag-pick-n-pay-stores","tag-psg-wealth","tag-sean-summers"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/841236","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\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=841236"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/841236\/revisions"}],"predecessor-version":[{"id":841238,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/841236\/revisions\/841238"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/825578"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=841236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=841236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=841236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}