Supermarket group Pick n Pay on Friday warned of a widening loss in interim earnings, pushing its shares as much as 3% lower on the day, though it had pared losses to 2.2%, or R26.39 a share by the close.
The group, which is finalising its financial statements for the 26 weeks to August 25, forecast a headline loss per share of 129.23c-140.98c compared to a loss of 117.48c in the previous corresponding period.
The comparable headline loss per share was expected to widen to 131.85c-142.84c compared with a loss of 109.88c per share before, Pick n Pay said in a statement.
The group is scheduled to release its first-half results on October 28.
The trading performance for the 26-weeks to August 25 reflected another strong performance from the Boxer segment, while the segment’s refreshed management team began to execute on the turnaround plan, Pick n Pay said.
The group said the execution of its two-step recapitalisation plan is proceeding well after the successful completion of its rights offer in August and receiving overwhelming shareholder support to press ahead with the listing of Boxer on the JSE’s main board towards the end of the year.
Pick n Pay, which is valued at R19.6bn on the JSE, has an ambitious turnaround strategy spearheaded by newly reinstated CEO Sean Summers, who returned to the group after leaving in 2007.
In the years after he left Pick n Pay, successive leaders struggled to reverse its declining performance that culminated in the failed Ekuseni strategy.
Under Summers, the group is phasing out the QualiSave brand and integrating unprofitable stores into Boxer in an effort to address strategic missteps. Summers has been reviewing and dismantling Ekuseni in preparation for the Boxer listing.
Ackerman Investment Holdings, the Ackerman family investment vehicle, will not be represented on the Boxer board after the unbundling following the family’s decision to relinquish control of Pick n Pay. Gareth Ackerman will step down as chair in 2025, ending a 40-year tenure on the board.
Shareholder backing of the rights offer was a crucial vote of confidence in recovery plans, setting the stage for a potential revival of the retailer’s market position and financial stability.
The rights led to the issue of 252.2-million new Pick n Pay ordinary shares at R15.86 each, at a ratio of 51.11 rights offer shares for every 100 Pick n Pay ordinary shares held.
By mid afternoon on Friday the group’s shares were down 2.67% at R26.25.
With Nompilo Gobo
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.