Is Pick n Pay’s Turnaround Real?

Is Pick n Pay’s Turnaround Real?
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Pick n Pay’s latest update shows signs of progress, but the full-year numbers tell a more complex story, especially for its core grocery business.

For the 53 weeks ended 2 March 2025, Pick n Pay released a trading statement  that paints a cautiously optimistic picture. Losses are narrowing sharply, thanks to fewer impairments, lower finance charges, and continued strength from discount subsidiary Boxer. Still, the group's main grocery business remains under pressure.

 


What’s behind these improvements?
Several factors have driven this positive shift:

  • Stronger performance at Boxer Retail Limited: Boxer continues to post steady profit growth, which helps offset losses in the broader group.
  • Significant reduction in impairments: Pick n Pay cut impairments from R2.4 billion last year to less than R0.5 billion. This materially improved the balance sheet.
  • Lower interest charges: Thanks to a successful recapitalisation plan, the group’s finance costs have decreased, easing pressure on earnings.
  • Better trading profit at Pick n Pay: Although still loss-making, the core business showed some improvement in trading profit.

What’s still under strain?
Despite these gains, Pick n Pay made it clear: its core grocery business is still operating at a loss when accounting for lease interest. This means that even with better trading performance, the turnaround is incomplete, and will take more time and work.

Pick N Pay

What does this mean for investors?
Pick n Pay’s trading update signals a company managing its way back from a difficult period, but not yet at profitability. The sharp reduction in losses per share and lower impairments are clear positives. Boxer’s consistent profit growth remains a bright spot supporting the group.

However, the fact remains that the flagship Pick n Pay grocery chain has not returned to profitability, and the path to sustainable earnings is still uncertain.

For investors, the takeaway is cautious optimism: the business is stabilising, but the turnaround is far from complete. Monitoring future earnings releases and operational updates will be key to assessing whether Pick n Pay can sustain and build on this progress.

The company released its audited full-year results on Monday, 26 May 2025, followed by a webcast presentation. You can find the details and replay on the Pick n Pay Investor Relations website.

 

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Disclaimer: This blog is intended for informational purposes only and should not be construed as financial advice. Before making any investment decisions, it's crucial to conduct your own research, consider your risk tolerance, and remember  past performance doesn’t guarantee future returns. 

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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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