Pick n Pay, the JSE-listed food retailer, has reported a significant half-year loss, leading to a 13% drop in its share price. The company blames the loss on elevated load-shedding costs and intense competition in the market.
- The retailer experienced a 97.5% decline in trading profit for the 26-week period ending in August 2023, amounting to R31.8 million compared to R1.253 billion in the same period last year.
- Load shedding, a practice implemented by the South African government to manage electricity demand, forced Pick n Pay to spend R396 million on diesel to operate generators. The company also faced additional abnormal costs totaling R596.8 million.
- The share price of Pick n Pay plummeted over 13% following the release of its financial results. As of Wednesday morning, it was trading at around R25.77 per share on the JSE.
- Trading expenses increased by 13.7% to R11.2 billion, leading to a decline in the trading profit margin from 2.4% to 0.1% compared to the previous year.
- The retailer reported a headline loss per share of 129.20 cents, exceeding the 88.76 cents reported last year. The loss aligns with the company’s previous trading update.
- Despite the challenging financial results, Pick n Pay aims to turn its fortunes around with a change in leadership. Sean Summers has been reappointed as CEO, with a focus on driving growth and profitability by improving customer service, execution in supermarkets, and collaboration with suppliers.