Revenue for the year increased to R115.4 billion (2023: R109.3 billion) while trading profit plummeted to R385 million (2023: R3 billion). Loss for the period was reported at R3.2 billion (2023: profit of R1.2 billion). Additionally, headline loss per share was 203.06 cents per share (2023: headline earnings per share of 259.25 cents per share).

Dividend
The Group’s dividend policy is to maintain a dividend cover range of between 1.5 times and 1.8 times headline earnings per share. As a result of the loss incurred, the Board has not declared a dividend in FY24 and has suspended all dividend payments until such time that the Board believes that there is sufficient cash generation to review the dividend policy.

Company's strategic plan and outlook
FY24 was a particularly difficult period for the Group. While its Boxer, Pick n Pay Clothing and online businesses continued to deliver strong results, Pick n Pay supermarkets struggled to gain sales traction while contending with gross profit margin pressure and load shedding costs, and consequently reported a substantial trading loss alongside a material asset impairment. This was exacerbated by sharply higher interest costs due to elevated gearing. Despite these challenges, the Group looks forward with cautious optimism:

- New experienced leadership at CEO, Group Executive, Regional and Commercial management levels has re-energised the Pick n Pay supermarkets business;
- Implementation of CEO Sean Summers strategic plan is underway, with encouraging early results;
- The two-step recapitalisation plan is making good progress, with the rights offer to be imminently launched. Successful implementation of the two-step plan will see a sharp reduction of interest costs and generate resources to drive the Pick n Pay turnaround;
- The Boxer IPO is set to unlock the value of the Boxer asset for Pick n Pay and its shareholders, and will allow Boxer to achieve its long-term growth potential.

The strategic plan is operationally focussed on the turnaround of Pick n Pay supermarkets and hypermarkets, with particular focus on eliminating losses incurred by specific loss-making company owned stores, and improving the performance of the remainder of the estate. Over 100 loss making supermarkets will either be closed or converted to Pick n Pay franchise or Boxer stores. Improving the performance of the remainder of the estate will be achieved via initiatives to drive like-for-like sales growth and optimise the operating model. The plan is underpinned by renewed customer focus, re-energised employees, and improved execution at store level. Sean indicated on his return that restoring the Group's Pick n Pay business to meaningful profitability would be a multi-year process. Given the extent of the FY24 loss reported by Pick n Pay, management has no illusions about the magnitude of this task. However, given that Pick n Pay has previously consistently traded at a profit, and the turnaround initiatives already in flight, the Group is confident this can be achieved over the medium-term.

The Group expects to improve its financial performance over the next two years. The improvement is expected to be derived from(a) execution of the strategic plan in Pick n Pay Supermarkets;(b) continued strong profit growth from Boxer and Pick n Pay Clothing; and (c) significantly reduced interest charges from the debt reduction post the planned recapitalisation.

Group total sales growth for the first 12 weeks of FY25 was 4.2%, slightly below FY24's 5.4%, but like-for-like sales growth, also at 4.2%, was ahead of FY24's 2.9%. Boxer's total sales growth for this 12 week period was in-line with H1 FY24, while Pick n Pay's total sales for the period declined slightly as a result of store closures. Importantly, like-for-like sales growth for Pick n Pay is up on FY24, driven by sequential monthly improvements in company-owned stores, as execution of the strategy gains traction.

Result webacast
The Group will hold an in-person and online results presentation at 8:30am this morning. All interested stakeholders are invited to watch the webcast which can be accessed using the following link: www.corpcam.com/pnp27052024 The slides accompanying the result presentation will be available on the Pick n Pay Investor Relations website at www.picknpayinvestor.co.za shortly before the commencement of the presentation. A playback of the webcast will be made available on our website approximately 2 hours after the presentation.