Pick n Pay Stores (PIK) H1 2025 earnings summary

Executive summary

• Group turnover rose 3.7% year-over-year to ZAR 56.1 billion, with like-for-like sales up 2.9%, driven by Boxer's double-digit growth and market share gains in Clothing.

• Pick n Pay segment faced a 0.3% turnover decline and a trading loss increase to R718.9 million, but company-owned sales grew 3.1% and online and clothing sales were strong.

• Refreshed management team and turnaround plan underway, with recapitalisation and rights offer (over 104% subscribed) significantly strengthening the balance sheet.

• Boxer IPO is on track for end-2024, expected to further support growth and capital structure.

• No interim dividend declared due to the loss position and ongoing turnaround efforts.

Financial highlights

• Gross profit margin declined to 17.9% (down 60bps year-over-year), reflecting a competitive environment and price investments.

• Trading profit increased to R82.5 million from R31.8 million last year, while EBITDA (excluding IFRS16) rose to R187.7 million.

• Comparable PBT loss widened to R1.1 billion, mainly due to Pick n Pay trading losses and higher finance costs.

• Net debt reduced to R2.3 billion (from R6.1 billion), with net debt/EBITDA at 2.7x, well within lender covenants.

• Basic loss per share worsened 39.6% to 140.83 cents; comparable headline loss per share increased 24.3% to 136.60 cents.

Outlook and guidance

• Full-year earnings expected to show meaningful improvement, driven by Boxer growth, reduced Pick n Pay trading loss, and lower funding costs.

• Boxer IPO expected to complete by end-2024, with proceeds to further strengthen the balance sheet and support turnaround.

• Group will report on a 53-week basis in FY25, with minimal impact on full-year earnings.

• Pick n Pay targets to halve its FY24 trading loss of R1.5 billion.