Pick n Pay Stores (PIK) H1 2025 earnings summary

Executive summary

• Leadership transition and management restructuring have strengthened operational focus, with a refreshed team driving turnaround plans and market share gains for Clothing and Boxer.

• Group turnover rose 3.7% year-over-year to R56.1 billion, with like-for-like sales up 2.9%.

• Boxer delivered robust growth, with turnover up 12% and trading profit up 16%, cementing its position as a leading soft discounter.

• Pick n Pay segment faced a 0.3% turnover decline and a 9.1% increase in trading loss to R718.9 million, but company-owned supermarkets and online/clothing sales showed improvement.

• Debt standstill and recapitalisation completed, including a rights offer over 104% oversubscribed, significantly strengthening the balance sheet.

Financial highlights

• Group turnover reached R56.1 billion, up 3.7% year-over-year, with like-for-like growth of 2.9%.

• Gross profit margin declined to 17.9% (down from 18.5%), mainly due to competitive pressures and price investments.

• Trading profit rose to R82.5 million from R31.8 million last year; EBITDA (excluding IFRS16) increased 159% to R187.7 million.

• Comparable PBT loss widened to R1.1 billion from R0.8 billion, mainly from higher financing costs and Pick n Pay trading losses.

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

Outlook and guidance

• No further gross margin contraction is expected in H2; margin pressures from supplier rebates and promotions are now in the base.

• Full-year earnings are expected to show meaningful improvement, driven by Boxer growth and reduced Pick n Pay trading losses.

• The company aims to halve the rate of Pick n Pay's FY24 trading loss by year-end and expects a strong festive trading period.

• Boxer IPO is targeted for end-2024, market conditions permitting, with proceeds to further strengthen the balance sheet.

• Group will report on a 53-week basis for FY25, with minimal impact on expected earnings.