Pick 'n Pay (PIK) is a retail grocery chain with over 2000 stores, mostly in South Africa, but also in the rest of Africa. The company was started by Raymond Ackerman in 1967 and became the dominant grocery retailer over time, before being displaced by Shoprite/Checkers. Summers has once again resumed the role of CEO, following his stint at Pick n Pay as CEO between 1999 and 2007.
In its results for the 52 weeks to 25th February 2024, the company reported turnover up 5.4% and a headline loss of 203.06c compared with a profit of 259.25c in the previous year. The company said, "Trading profit declined 87.4% to R385.0 million, reflecting a R1.5 billion trading loss for Pick n Pay (a sharp reversal versus FY23's R1.3 billion profit), and a R1.9 billion trading profit for Boxer (R1.8 billion profit in FY23). The result was further impacted by a 198.8% increase in net interest paid to R701.8 million, as a result of higher gearing and increased interest rates."
Technically, Pick 'n Pay has been in a downward trend since 2016 and has lost substantial ground to Shoprite. On the latest results, it remains in a long-term downward trend. The link-up with Mr. D and Takealot should help the company to catch up in the online shopping market. To re-capitalise the business, it is planning to separately list Boxer and conduct a rights issue to raise R4bn in mid-2024. The rights issue was approved by shareholders at a general meeting on 26th June 2024. This would require the Ackerman family to inject R1bn to retain their position as 25% shareholders.
We recommended that you apply a 200-day simple moving average and wait for a clear upside break before investigating further. That break came on 27th May 2024 at a price of 2558c. The share has since moved up to 2739c. Despite this, the share remains risky.
In its results for the 52 weeks to 25th February 2024, the company reported turnover up 5.4% and a headline loss of 203.06c compared with a profit of 259.25c in the previous year. The company said, "Trading profit declined 87.4% to R385.0 million, reflecting a R1.5 billion trading loss for Pick n Pay (a sharp reversal versus FY23's R1.3 billion profit), and a R1.9 billion trading profit for Boxer (R1.8 billion profit in FY23). The result was further impacted by a 198.8% increase in net interest paid to R701.8 million, as a result of higher gearing and increased interest rates."
Technically, Pick 'n Pay has been in a downward trend since 2016 and has lost substantial ground to Shoprite. On the latest results, it remains in a long-term downward trend. The link-up with Mr. D and Takealot should help the company to catch up in the online shopping market. To re-capitalise the business, it is planning to separately list Boxer and conduct a rights issue to raise R4bn in mid-2024. The rights issue was approved by shareholders at a general meeting on 26th June 2024. This would require the Ackerman family to inject R1bn to retain their position as 25% shareholders.
We recommended that you apply a 200-day simple moving average and wait for a clear upside break before investigating further. That break came on 27th May 2024 at a price of 2558c. The share has since moved up to 2739c. Despite this, the share remains risky.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.