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Ackerman family to relinquish majority voting control in PnP

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Investors have shrugged off Pick and Pay’s disappointing full-year results and rather focused on the group’s key plans to turn the business around.

Earlier on Monday, the retailer announced a trading loss of 87% for the year ended 25 February 2024.

Pick ‘n Pay also announced that the founding Ackerman family would be relinquishing their majority voting control in the business.

The results did not come as a surprise to the market, after a warning by the retailer in a sales forecast earlier this month.

CEO Sean Summers said as the business returned to profitability under his strategic plan, the group’s financials would be bad before they got better.

Among the interventions considered, is the closure or conversion of over 100 loss-making supermarkets, to Pick ‘n Pay franchise or Boxer stores.

He says his strategic plan is underpinned by renewed customer focus, re-energised employees and improved execution at store level.

Pick n Pay’s CEO, Sean Summers says, “The reality for the company is that for a fairly protracted time, Pick and Pay has been in decline. There are many reasons for that, at the crux was the fact that the company to a degree lost its focus on its basic operation as a retailer. Our main goal since we have been back was to test where Pick and Pay found itself and to assure that we reasonably set aside the recovery plan for the organisation that entails getting into grips with fundamentals that had been lost in the organisation.”

Pick ‘n Pay’s founding family the Ackerman’s have announced that they will give up their majority voting control, bringing it to under 50% after the planned Rights Offer.

The family will also give up the right to nominate the chairman, CEO and chief financial officer immediately.

Despite the tumble in profit, the market has reacted positively.

Investment manager at Rand Swiss, Gary Booysen says, “Finally, we’re getting decision from Pick and Pay that the market has been looking for for a long time. and that’s a real shake up, a real change at Pick and Pay because for years we had been promised that a turn around is around the corner and never really happened. obviously with the Ackerman family taking more of a back seat, dropping board seats, they will still be following their rights offer, Pick and Pay raising R4 billion recapitalising really trying to get its strategy on track. I think the market is very optimistic and you can understand why the stock is up six and a quarter percent at the moment. So, the market definitely liking what it is seeing. Even through we did see a decline of 87 percent in full year trading profit. The market is watching and asking is this the time that the market implement its turn around. other parts, yes they are going to shut a lot of those stores and they announced that they expect volume decline but this level of change in the company is definitely needed.

On a positive note, the grocery retailer did see its Boxer, Pick ‘n Pay Clothing and online businesses continue to deliver strong results.

Online sales at Pick ‘n Pay grew by nearly 75% in the past year while sales at Boxer grew 17.3%, with 50 new stores opened.

 

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