Latest news with #R1bn
IOL News
26-05-2025
- Business
- IOL News
Pick n Pay's turnaround strategy: aiming for profitability by 2028
Pick n Pay Retail giant Pick n Pay, which is in the throes of an operational turnaround, hopes to achieve trading profit break-even in its 2028 financial year. Image: Supplied. Pick n Pay's turnaround is taking shape, but initial estimates predicting the retailer would reach breakeven in the 2027 financial year have proven over-optimistic. The group now forecasts this milestone will only be achieved in 2028. The group's pre-tax and capital items loss improved to R237 million for the 52 weeks ending March 2, compared to a R1.4 billion loss in 2024. This improvement was driven by a R1bn reduction in the Pick n Pay segment trading loss, supported by a 27.3% decrease in interest paid as the recapitalisation began to impact debt service costs. CEO Sean Summers, who announced on Monday that he has extended his contract until May 2028, said in an interview the initial target date of 2027 was an uninformed estimate. The group now has a clearer understanding of what is required to return to profitability. Summers said that he extended his contract to ensure continuity. If he were to leave in October next year as initially planned, he would have needed to start searching for a new CEO in six to nine months, which he felt was too soon during the turnaround process. 'There are no surprises in this result; we are meeting the guidance we have provided every six months, making calm and steady progress. You cannot rely on quick wins in our situation, and it will continue to be a journey as we rebuild our institutional memory,' said Summers. He emphasised their strategy is to build 'muscle memory for long-term success,' saying that there would be no 'quick fixes.' The group now anticipates reaching trading profit breakeven in the 2028 financial year, compared to the previous forecast of 2027. Video Player is loading. 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Advertisement Next Stay Close ✕ Ad Loading Analysts Anchor Capital investment analyst Robbie Proctor said the improvement in like-for-like sales in the second half of the previous year had continued into the first two months of the current year, which is encouraging. While Pick n Pay's market share is expected to decline as it closes stores, the core store estate is still showing signs of life. 'Pick n Pay remains a well-known brand, providing credibility to any turnaround effort. However, we believe Pick n Pay has a market segmentation issue under a single banner, relative to Shoprite with its Checkers, Shoprite, and Usave brands, which effectively segment the market offering,' Proctor said. Umthombo Wealth chief investment officer Alex Duys remarked that Pick n Pay delivered commendable results, 'exceeding many of our expectations.' He added: "Considering that management had to navigate the complexities of raising equity, preparing for the Boxer IPO, and executing an operational turnaround - all with limited resources - this performance is a testament to the remarkable efforts of the entire team.' Duys said Pick n Pay management have maintained a long-term strategic focus. 'Rather than opting for superficial fixes to boost short-term results, they are committed to implementing the necessary structural changes to ensure sustainable success,' he said. 'This was an important year as we executed the first leg of our operational and financial recovery. We are exactly where we said we would be when presenting the strategy last May, and in some aspects, we are tracking slightly ahead. Particularly pleasing is the reduction in our Pick n Pay trading loss by 64% after predicting a 50% reduction,' Summers said. He said they have addressed around 40 Pick n Pay stores through conversion, closure, or repositioning, with approximately 30 more loss-making stores still to tackle. Six turnaround priorities The first of six turnaround priorities announced in May last year was to recapitalise. A two-step recapitalisation plan—raising R12.5 billion through the Pick n Pay rights offer (R4bn) and the Boxer JSE listing (R8.5bn)—was achieved, restoring the group to a net cash position of R4.2bn. 'We have started to give much-needed attention to our core Pick n Pay supermarkets, and we are pleased to see early results reporting positive like-for-like sales growth, notwithstanding the sustained pace of new store openings by our competitors in a restrained and competitive market,' Summers added. The second priority was to accelerate like-for-like sales growth, with the group turnover for the 53-week period rising by 5.6%. Over the past 18 months, Pick n Pay's company-owned supermarkets delivered gains in like-for-like sales growth, improving from -0.5% in the second half of 2024 to +3.6% in the second half of 2025. Inflation in Pick n Pay recorded at just 2.1% for the 2025 financial year, sharply down from 8.2% in 2024 and well below Statistics SA Food CPI of 3.9%. The third priority was the store estate reset, which involved converting to Boxer, franchising, or closing stores with no prospect of returning to profitability. The retailer has also begun opening and committing to new stores and will increasingly refurbish its supermarkets. The fourth pillar of the strategy is leadership and people, focusing on driving operational execution and restoring institutional memory. Key steps had been taken, including reinstating regional leadership structures and launching a campaign to reignite employee purpose. The fifth pillar, strengthening partnerships, was demonstrated in the tie-up with FNB e-Bucks. There was a 48.7% growth in online sales for the 53 weeks, led by asap! and PnP groceries on Mr D. Pick n Pay asap! has grown to 600 locations, and franchisee adoption of asap! has doubled in two years, unlocking new growth potential. Pick n Pay Clothing delivered 11.6% growth from standalone stores and reported market share gains. Thirty additional company-owned stores during 2025 brought the total estate to 415 stores. "Pick n Pay has over R4.3 billion in cash at its disposal to invest in pricing to attract shoppers. Given the subdued consumer backdrop, people are actively seeking deals when planning their weekly or monthly shop. There is a risk that Shoprite will need to follow a portion of the promotional activity, putting pressure on margins.," said Proctor. Duys said Pick n Pay's current focus did not appear to be on aggressively competing for market share but rather on driving efficiencies and enhancing the overall quality of its portfolio. 'We expect Pick n Pay to shift its focus back to regaining market share only once its operational turnaround is complete. At that point, the business will be far better positioned to compete effectively across all areas, supported by a more robust and efficient foundation,' Duys said. Visit: BUSINESS REPORT
Daily Maverick
25-05-2025
- Politics
- Daily Maverick
‘New evidence' — stalled R1bn Malusi Booi and Ralph Stanfield tender fraud case still on track
The DA's former Cape Town mayoral committee member Malusi Booi is not necessarily in the clear. This comes after the provisional dropping of charges linked to allegations of unlawfully awarded R1bn in contracts, against him and suspected 28s gang boss Ralph Stanfield. Former City of Cape Town DA human settlements mayoral committee member Malusi Booi took to social media a few days ago and thanked several people for believing in his 'innocence' after commercial crime charges against him were provisionally withdrawn. But Booi and his co-accused, including suspected 28s gang boss Ralph Stanfield, have not been acquitted or officially cleared of the charges. The National Prosecuting Authority (NPA) and the South African Police Service (SAPS) have made it clear that new evidence, which is being investigated, necessitated the provisional withdrawal. This means that the charges can still be reinstated and that the new evidence may produce more criminal accusations or a bolstered case. Politics and policing Investigations into issues linked to Booi and Stanfield have become highly controversial – and political – and have led to accusations about what has been motivating police to act. The City of Cape Town is DA-run while the SAPS is viewed as an ANC remit, so the overall situation creates the impression that tensions between the two parties are at play. This weekend, Booi took to social media and effectively said he was the target of a smear campaign, much like Mayoral Committee Member for Safety and Security JP Smith's insistence after a raid on his office earlier this year that has been linked to issues involving Stanfield. While there have been smear campaign insinuations and while no one in the matter has been found guilty in a court, City of Cape Town officials have acknowledged dodgy dealings relating to its human settlements arena. Carl Pophaim, who replaced Booi as Cape Town Mayco member for human settlements, previously told journalists that various investigations were focused on 'part of this one singular thing, an attempt to capture human settlements and construction in Cape Town'. Merged, then provisionally dropped Booi and nine others were accused of being involved in a tenders-for-cash enterprise, which the State has alleged was headed by Stanfield and his wife, Nicole Johnson. The tenders flagged in the case were allegedly worth more than R1-billion. Booi faced allegations that he accepted gratification from Stanfield and, in exchange, used his influence over tenders. Aside from those commercial crime charges, Stanfield, Johnson and several others also face other criminal accusations. Stanfield, for example, faces accusations that he was involved in the 2019 assassination of then Hard Livings gang boss Rashied Staggie. Other charges against Stanfield and Johnson's co-accused in this case relate to the 2023 murder of City of Cape Town staff member Wendy Kloppers, who was shot at a housing development site in Delft. She was killed, apparently because she had refused to give in to gangsters demanding contractors' work. The commercial crime case, in which Booi was the main accused, had been merged with the criminal case in which Stanfield and Johnson were the key accused. But on Friday, 23 May 2025, the tender-related commercial crime charges were provisionally withdrawn against Booi, Stanfield, Johnson and nine others. While Stanfield, Johnson and several others remain in custody because of the criminal charges they face in the case set to resume in July, Booi, who was previously released on bail, no longer faces formal accusations. 'Purpose was to destroy me' After the charges were provisionally dropped on Friday, Booi left the Cape Town Magistrates' Court and told journalists he was 'relieved' and was headed home 'to start a new life'. Booi also took to the social media platform X that day to further express himself. NEWS JUST IN [WATCH] Fraud related charges against former City of Cape Town Human Settlements MMC Malusi Booi and nine others have been withdrawn. They relate to a billion rand housing tender fraud within the city's human settlements directorate @NtuthuzeloNene — EWN Reporter (@ewnreporter) May 23, 2025 He posted: 'I would like to take this opportunity to thank my 84-year-old mother, my ancestors, my partner, my entire family, friends, Nitta & crew, Manxasana & crew for their unwavering support & belief in my innocence! 'Thanks to the Nkomo Foundation. I maintain my innocence.' Days later, on Sunday, 25 May, Booi took to X again, implying that he was the victim of a smear campaign. 'Just for the record! There was never a R1bn tender fraud City of Cape Town never lost a cent,' Booi's post said. 'There is no site or awarded tenders Why AG never picked it up or internal audit The purpose was to destroy me and tarnish my reputation! I pray a living God.' Just for the record! There was never a R1bn tender fraud City of Cape Town never lost a cent There is no site or awarded tenders Why AG never picked it up or internal audit The purpose was to destroy me and tarnish my reputation! I pray a living God🙏 — Malusi Booi (@MalusiBooi) May 25, 2025 While Booi is 'relieved' at the withdrawal of charges, the NPA and SAPS have reiterated that it does not mean the case has ended or been derailed. According to them, key information has been uncovered. Fresh evidence The Western Cape's NPA spokesperson Eric Ntabazalila explained that the commercial crime charges had been provisionally withdrawn against Booi, Stanfield, Johnson and nine co-accused 'pending the finalisation of an investigation on newfound evidence against them'. 'Police discovered new evidence during their investigation, and it is apposite at this stage to provisionally withdraw the 16 commercial charges against the accused pending the finalisation of the investigation stemming from the newfound evidence. 'The State will reinstate the charges once the investigation has been finalised.' Police in the Western Cape released a statement on the saga. Brigadier Novela Potelwa said the case 'is still on course despite the provisional withdrawal of commercial charges'. Charges can be reinstated She said it was not uncommon for the direction of a complex investigation to change, based on new information.'It is envisaged that the commercial charges provisionally withdrawn will be reinstated in due course,' Potelwa said. 'The Western Cape SAPS feels compelled to give assurance that the decision [to provisionally withdraw the commercial charges] is by no means an indication of failure on the part of investigators.' There is no indication of what the new evidence is. Booi was arrested in September last year, several months after his City of Cape Town office was raided in March 2023. He has also been fired. Earlier this year, another raid, which according to police was also linked to the whole Stanfield saga, kicked up even more controversy for the City of Cape Town. SAPS and the City On 24 January, police raided JP Smith's office and that of mayoral committee member Xanthea Limberg, who heads the city's energy portfolio. Unlike what happened to Booi, Smith and Limberg were not suspended. Cape Town Mayor Geordin Hill-Lewis said there was insufficient evidence to warrant suspensions. Smith has insisted that he is the target of a smear campaign and that the raid had been conducted to tarnish his name. Earlier this month, Smith announced that he was taking legal action against the SAPS. He said he had lodged an application in the Western Cape High Court because 'immediately after the searches I was advised that the warrants which contain numerous falsehoods, errors and critical omissions are unlawful and should be legally challenged'. Smith said: 'The media frenzy and reputational harm resulting from the search on my office should never have been permitted. 'The allegations against me are false and there is abundant evidence in the public domain of my continued actions to do the exact opposite of which I am accused by SAPS, including the continuous taking action to remove compromised and corrupt individuals from the city'. As if underscoring what Smith said about action against staffers, the SAPS announced last week that two City of Cape Town law enforcement officers had been arrested on charges of kidnapping and extortion. Smith had issued a statement saying the city's Safety and Security Investigations Unit had launched an internal investigation, which led to the arrests. Beyond smear claims – murder and red flags In the Stanfield-linked saga, both Booi and Smith's official offices were raided, and both have since separately said they are the targets of smear campaigns. On Sunday, a part of Booi's post on X said: 'The purpose was to destroy me and tarnish my reputation!' As for Smith, earlier this month, in the statement on the legal action he launched against the SAPS, he said that he had been told the purpose of the campaign against him was to 'destroy my reputation'. There are highly concerning aspects of the now provisionally withdrawn commercial crime charges and to the city's human settlement remit. City manager Lungelo Mbandazayo previously told IOL that an investigation 'saw some of the officials from the human settlements department being suspended and others are attending disciplinary hearings. 'They were even tailor-making tenders before they went out, so those same companies could easily apply and be granted those tenders. They (the gangsters) don't operate in isolation. 'They exist because internally, there are people helping them. When you look at any criminal activity that is thriving, it's because people are conniving.' Serious dangers are associated with this arena. One of Booi's co-accused, who previously faced charges alongside him, was Abdul Kader Davids. On 20 September 2024, two days after being released from custody on R250,000 bail in that case, Davids was fatally shot in the Cape Town suburb of Mitchells Plain. DM
TimesLIVE
23-05-2025
- TimesLIVE
Charges provisionally withdrawn against '28s gang boss' and ex housing MMC in R1bn housing tender case
The prosecution provisionally withdrew fraud charges on Friday against alleged 28s gang boss Ralph Stanfield and former human settlements MMC Malusi Booi linked to R1bn worth of tenders related to housing in Cape Town. Stanfield was charged with his wife Nicole Johnson, Booi, and several others. The group was arrested in September and Booi was granted R250,000 bail. National Prosecuting Authority (NPA) spokesperson Eric Ntabazalila said provincial director of public prosecutions advocate Nicollette Bell provisionally withdrew the charges 'pending the finalisation of an investigation on newfound evidence against them'. 'Advocate Bell also provisionally withdrew the charges against Suraya Manuel, Muhammed Amod, Randal Mullins, Brenda Mullins, Thuli Imgib, Nomvuyo Mnyaka, Lorna Ndoda, Siphokazi September, Kyle Stanfield, Barbara Johnson and Pakamisa Nondabula,' he said. 'Police discovered new evidence during their investigation, and it is apposite at this stage to provisionally withdraw the 16 commercial charges against the accused pending the finalisation of the investigation stemming from the newfound evidence. The state will reinstate the charges once the investigation has been finalised.' Ntabazalila said Stanfield, Johnson, Johannes Abrahams, Denver Booysen, Jose Brandt, Jonathan Cloete, Shakeel Pelston, Imtiyaas Sedick, Warren Lee Dennis, Michael Morris, Chevonne McNabb, Sharazaadt Essop, Brandon Cornelius and Keithan Gardiner would be indicted in the high court in Cape Town for alleged gang-related offences including allegedly contravening the Prevention of Organised Crime Act. Ntabazalila said this related to the murders of city official Wendy Kloppers, Rashied Staggie, William Stevens, Faizel Adams and Ismail Abrahams. Kloppers was shot at a housing development site in February 2023. Staggie was an infamous gang boss. He was killed outside his Salt River home, in Cape Town, in 2019 shortly after his release from prison. His twin brother, Rashaad, with whom he founded the notorious Hard Livings gang, was killed on the same street more than 20 years ago. 'The court postponed the case against the remaining accused until July 14 to ensure the state has provided all further particulars to the defence before the case is transferred to the high court for a pretrial conference on November 7,' said Ntabazalila.
TimesLIVE
23-05-2025
- TimesLIVE
Case withdrawn against Cape politician Malusi Booi
Former Cape Town human settlements MMC Malusi Booi, who was arrested over a R1bn housing tender fraud case, is a free man after the case was withdrawn in court on Friday. 'I thank my 84-year-old mother, my ancestors, my partner, my entire family and friends for their unwavering support,' he said afterwards on X. 'I maintain my innocence.' Booi, who said he is now a farmer in the Eastern Cape, was arrested in September and granted R250,000 bail. In January, lawyers for the ex-DA councillor and his co-accused complained that delays in the investigation had prejudiced them.
Daily Maverick
23-05-2025
- Politics
- Daily Maverick
Fraud charges against Malusi Booi in R1bn tender case dropped, for now
The case against former Cape Town mayoral committee member Malusi Booi involving allegations of unlawfully awarded tenders worth more than R1bn was provisionally withdrawn on Friday. The corruption case against former City of Cape Town councillor Malusi Booi was provisionally withdrawn on Friday, 23 May 2025. The former mayoral committee member was arrested in September 2024 and faced charges relating to alleged unlawful tenders worth more than R1-billion. It was a short appearance at the Cape Town Magistrates' Court as Booi and his co-accused, which include suspected 28s gang boss Ralph Stanfield. Booi was dressed in a black jacket and pants and shortly after his appearance alongside his former wife, it was announced that the charges against him had been dropped. Fired after raid Booi was a member of the DA and MMC for Human Settlements when it was announced in March 2023 that he had been fired by Mayor Geordin Hill-Lewis after a raid at his office. At the time, he told Daily Maverick that he wanted to clear his name. He was arrested on charges related to fraud, money laundering and corruption and was granted bail of R250,000. He was alleged to have played a central role in a tender enterprise, including Stanfield and his wife, Nicole Johnson. 'I maintain my innocence' After the hearing on Friday, Booi posted on social media platform X that he maintained his innocence. I would like to take this opportunity to thank my 84 year old mother, my ancestors, my partner, my entire family, friends, Nitta & crew, Manxasana & crew for their unwavering support & belief in my innocence! Thanks to the Nkomo Foundation 🙏 I maintain my innocence 🙏 — Malusi Booi (@MalusiBooi) May 23, 2025 Stanfield and the other co-accused were still appearing in court at the time of writing. The state wants to transfer their case to the Western Cape High Court in November 2025, while Stanfield and other defendants questioned why their case was being postponed yet again. Before proceedings began, a small group of about 20 people held signs calling for Stanfield to be released. They also claimed the 'media is controlling the narrative and the mind of the masses'. The group, which largely consisted of elderly women, were holding signs and did not speak to the media.
