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Pick n Pay anticipates full-year losses amid significant deterioration – The Zimbabwe Mail

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Pick n Pay, South Africa’s third-largest supermarket chain, announced on Wednesday that it expects to report a full-year loss, driven by a 2.8 billion rand (US$155 million) impairment at its major supermarkets, which generate losses and perform poorly.

Despite the gloomy forecasts, the market reacted positively to the company’s debt restructuring agreement with lenders, resulting in a 9.4 percent increase in its share price.

New CEO Sean Summers faces the challenge of revitalizing a company that has been losing market share to larger rival Shoprite and other competitors for more than a decade in a highly competitive and economically strained market characterized by high rates of interest and rising inflation. His main objective is to improve the performance of Pick n Pay’s core supermarket business.

Pick n Pay, which also owns discount grocery retailer Boxer, projected a loss per share of between R6.37 and R6.86 for the financial year ending February 25, compared with earnings per share of R2 .43 from the previous year.

The company explained that around R1.8 billion of the impairment relates to loss-making company-owned Pick n Pay stores, which are scheduled to close or convert to Pick n Pay franchises or Boxer stores as part of the group’s strategic plan. . A further impairment of R1 billion is attributed to poorly performing company-owned stores that will remain operational.

Other factors contributing to the anticipated loss include higher net debt service costs and additional diesel expenses for power generators during blackouts, ensuring stores remain open.

Summers’ turnaround strategy and debt restructuring are seen as crucial steps in stabilizing Pick n Pay and steering it toward future growth.

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