Trading Day – Pick n Pay feels the pain, Tiger Brands revenue falls

Pick n Pay reported a R3.2 billion net loss for the 2023/24 financial year. While the retailer’s Boxer and Pick n Pay Clothing businesses generated strong returns, severe underperformance in the company’s core Pick n Pay Supermarket business resulted in negative investment returns and a substantial trading loss.

Barloworld’s interim results revealed a drop in profit from continuing operations, falling from R1.1 billion to R971 million.

Tiger Brands reported a drop in revenue, down to R19.2 billion from R19.4 billion in the previous period. Despite restructuring and a difficult trading environment, the company still reported an increase in net profit for the period. 

Here is the biggest investment news of the day so far –

• Pick n Pay’s net profit dropped 373%, resulting in a R3.2 billion net loss. The retailer released its audited results for the year that ended 25 February 2024. The group reported a 373% decrease in its net profit, dropping from a R1.17 billion profit to a R3.2 billion net loss. For the first time in Pick n Pay’s listed history, it has become technically insolvent, with total liabilities exceeding total assets by R183 million. The retailer’s debt increased tremendously, with its total liabilities increasing by R8 billion from the previous period. The largest contributor to the increased liabilities was interest-bearing debt, which doubled to R11.4 billion. The retailer’s interest expense on debt cost is R2.4 billion for the year. Boxer, Pick n Pay clothing, and asap! and Mr D showed growth in 2023/24, with PnP clothing being the fastest-growing brand player.

• Barloworld’s profit from continuing operations fell from R1.1 billion to R971 million. The industrial processing, distribution, and services company released its results for the six months through March 2024. The company’s revenue from continuing operations fell by 7.7%, from R20.8 billion to R19.2 billion. Profit from continuing operations fell from R1.1 billion to R971 million. Barloworld attributed much of the group’s performance in South Africa to the country’s high inflation, high-interest rate environment, and cost-of-living constraints.

• Tiger Brands’ revenue decreased to R19.2 billion from the previous period’s R19.4 billion. The company released its results for the six-month period through March 2024. The South African packaged goods company has a range of brands, including Tastic, Albany, All Gold, Purity, and Koo. The company’s profit for the year increased to R1.4 billion from the prior period’s R1.2 billion. The company explained that these results “reflect the tough trading environment with negative volume growth across retail and wholesale channels”.

It remains to be seen how these events will affect these companies and shareholders in the long term.