By Nqobile Dludla
JOHANNESBURG (Reuters) -South African grocery group Pick n Pay on Monday reported a narrower full-year loss before tax, reflecting a lower trading loss in its core supermarket business, and said it expects that unit to now break even in 2028.
The country’s second biggest grocery retailer by southern Africa turnover is in the middle of a turnaround aimed at regaining customers and returning to profitability after years of losing market share to bigger rival Shoprite and underperforming stores.
Pick n Pay’s loss before tax and capital items came in at 237 million rand ($13.3 million) in the 53 weeks ended March 2, from a loss of 1.4 billion rand the previous year.
The full-year trading loss in its core Pick n Pay business narrowed by 1 billion rand to 549 million rand, the company said.
The results were also supported by a 27.3% reduction in net interest paid as the group’s recapitalisation plan made its initial impact on debt service costs, it said.
“When I returned in October 2023, I stated that the recovery of Pick n Pay would be a multi-year process and that things would get worse before they got better,” said CEO Sean Summers.
“It is our sense that we see this unfortunate chapter now bottoming out.”
The group previously guided that it anticipated the Pick n Pay core business to break even on a trading profit-after-lease-interest basis in financial year 2027. It now expects a 2028 break even, Summers added.
Overall group turnover grew 5.6% to 118.6 billion rand, buoyed by a 13.2% growth in discount grocery chain Boxer and 1.9% growth from its Pick n Pay business.
The Pick n Pay business returned to a trading profit in the second half of the financial year as it drew back some customers and on a like-for-like sales growth revival. The group closed or converted 40 loss-making South African supermarkets.
To drive growth, the retailer has also improved its product range and is focusing more on reviving its fresh product range, through upskilling staff in butchery, bakery and fruit and vegetables, Summers told Reuters.
The group doubled the capital expenditure for the Pick n Pay unit to 1 billion rand this year, which will be largely used to refurbish stores.
($1 = 17.8156 rand)
(Reporting by Nqobile Dludla; Editing by Jamie Freed, Varun H K and Susan Fenton)
