Pick n Pay Stores (PIK) H2 2026 earnings summary

Executive summary

• Achieved group turnover of ZAR 120.3 billion, up 3.4% year-over-year, with Boxer delivering market-leading 12.3% turnover growth and operational execution improvements.

• Pick n Pay segment turnover declined by 1.6% due to store reset, but like-for-like sales and volume growth returned in H2 and continued into the new year.

• Profit before tax and capital items reached ZAR 360 million, a significant swing from a ZAR 237 million loss last year, mainly due to a ZAR 681 million positive swing in net funding interest.

• Recapitalization completed, leadership structures reset, and store estate reset plan executed targeting loss-making stores.

• Strong cash position with ZAR 7 billion on the balance sheet after Boxer capital raise, supporting future growth and turnaround plans.

Financial highlights

• Group trading profit was ZAR 1.7 billion, down from ZAR 1.8 billion year-over-year; EBITDA (pre-IFRS 16) declined by ZAR 0.2 billion to ZAR 1.6 billion.

• Headline earnings loss improved by 5.4% to ZAR 386 million; HEPS improved 14.6% to -52.58c.

• Cash on hand at year-end was ZAR 3.1 billion, with ZAR 2.4 billion attributable to Pick n Pay; group net cash reduced by ZAR 1.1 billion year-over-year.

• Free cash flow utilization improved to ZAR 2 billion from ZAR 2.6 billion last year, though above original guidance due to weaker operational performance.

• CapEx investment increased to ZAR 2.1 billion gross (ZAR 1.9 billion net), focused on store revamps, maintenance, and franchise acquisitions.

Outlook and guidance

• Store estate reset largely complete; returning to store growth in FY 2027.

• CapEx guidance for Pick n Pay increased to ZAR 1.4 billion for the next year.

• Cash flow burn for FY 2027 expected to be in line with FY 2026, with break-even for Pick n Pay segment now targeted for FY29 due to operational and labor restructuring.

• Focus remains on achieving cash flow break-even and improving trading margins to 2-4% long-term.

• Confidence in turnaround objectives remains strong, with full benefits expected in FY27–FY29.