Interim report
Page 1
Unaudited Group Condensed Unaudited Group Condensed Interim Financial StatementsInterim Financial Statements For the 26 weeks ended 30 AugustFor the 26 weeks ended 30 August 20262026
Page 2
Contents Review of operations 1 Group condensed interim financial statements 6 Appendix 1 – Pro forma financial information 18 Appendix 2 – Additional information 20 Overview of store estate 21 Number of stores 22 Corporate information 23
Page 3
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 1 Review of operations H1 FY27 Group highlights ▪ Progress on Pick n Pay turnaround initiatives: including the successful agreement reached on the restructure of the store labour model and the withdrawal of the Section 189 consultation process; ▪ Pick n Pay segment trading profit recovery: Pick n Pay segment trading loss reduced by 16.9%, driven by gross profit margin accretion and contained trading expense growth; ▪ Solid Boxer performance: Boxer opened its 600th store and increased profit before tax and capital items by 10.6%; ▪ Group profit recovery: Group Headline loss reduced by 31.9% to R299 million; ▪ Balance sheet strength: Group net cash on hand of R10.0 billion, including R 7.7 billion within Pick n Pay. Financial results for the 26 weeks ended 30 August 2026 Key Group financial indicators 26 weeks to 30 August 2026 H1 FY27 26 weeks to 31 August 2025 H1 FY261 % improvement Turnover R60.5 billion R59.0 billion 2.4% Trading profit R490 million R310 million 58.1% Trading profit margin 0.8% 0.5% Loss before tax and capital items (R139 million) (R317 million) 56.2% Headline loss (R299 million) (R439 million) 31.9% Headline loss per share (HEPS) (40.71 cents) (59.77 cents) 31.9% Group result summary The Group reported a 56.2% (R178 million) year-on-year improvement in loss before tax and capital items to R139 million, against a loss of R317 million for H1 FY26. The profit improvement was delivered at the operating level, with trading profit improving by R180 million, while net finance costs were approximately flat. The Headline loss reduced by 31.9% to a loss of R299 million, after taking into account the Boxer non-controlling interest (up 34.1 % to R232 million). Group turnover increased 2.4%, with 6.3% growth from Boxer and the Pick n Pay segment approximately flat. The gross profit margin expanded 0. 7% to 18.8%, with improvement in both the Pick n Pay and Boxer gross profit margin. Other income grew 4.8%. Trading expenses increased by 4.5%, driven by the Boxer store rollout. The R180 million (58.1%) Group trading profit improvement to R490 million was the combined result of a R75 million increase in Boxer trading profit (to R1.0 billion) and a R105 million reduction in the Pick n Pay trading loss (to R0.5 billion). Turnover (Rm) H1 FY27 H1 FY261 % change Boxer 24 094 22 656 6.3% Pick n Pay* 36 369 36 392 (0.1%) South Africa 34 687 34 874 (0.5%) Rest of Africa 1 682 1 518 10.8% Group 60 463 59 048 2.4% * Pick n Pay turnover growth impacted by a net year-on-year reduction of the store estate of 19 company-owned and franchise supermarkets. Pick n Pay segment operational performance Pick n Pay (PnP) segment turnover Pick n Pay turnover declined 0.1%, with Pick n Pay South Africa declining 0.5% and Rest of Africa increasing 10.8%, driven by exchange rate translation gains from a stronger Zambian Kwacha. While the store estate reset plan has been concluded, the impact of stores closed during the past twelve months continues to have a (reduced) negative impact on total turnover growth. As a consequence, PnP South African turnover declined by 0.5% in this period vs. -1.4% in full-year FY26 (52/52w basis). The total number of Pick n Pay company-owned and franchise supermarkets declined by 19 stores over the past 12 months (and 6 stores over the past 6 months) to 520 stores. Within the 12 month period, the number of company-owned supermarkets and hypermarkets increased by two stores, to 313 stores, while franchise supermarkets declined by 21 stores to 207 stores. Pick n Pay continues to optimise the store estate on an ongoing basis. In this regard, 14 franchise supermarkets were converted to company-owned supermarkets during the past twelve months (10 within H1 FY27). Similarly, two Pick n Pay supermarkets were converted to Boxer Superstores during H1 FY27. 1 H1 FY26 turnover restated to now include certain items previously recognised within costs of merchandise sold. H1 FY26 trading profit is not impacted.
Page 4
www.pnp.co.za 2 Pick n Pay’s internal selling price inflation (as measured on a volume-held-constant basis) for the period was 1.5%, down on the 2.2% and 1.9% reported for full-year FY25 and FY26 respectively. Pick n Pay’s H1 FY27 internal selling price inflation was below Statistics SA food and non-alcoholic beverage inflation for the period of 2.0%, as Pick n Pay maintained its commitment to deliver low prices to customers. PnP estate – number of stores H1 FY26 FY26 H1 FY27 6-month net change 12-month net change PnP Supermarkets and Hypermarkets 539 526 520 (6) (19) Company-owned 311 308 313 5 2 Franchise 228 218 207 (11) (21) PnP Liquor 468 459 453 (6) (15) PnP Clothing 424 437 439 2 15 Express forecourts 184 190 190 0 6 Total 1 615 1 612 1 602 (10) (13) Note: Liquor and Clothing stores are company-owned and franchise. Express forecourts are franchise. Table includes both SA and non-SA stores, and excludes Boxer and associate TM Supermarkets. South African company-owned and franchise supermarkets Pick n Pay remains focused on driving improved like-for-like sales growth. Like-for-like sales for company-owned supermarkets grew 2.4% year-on-year. With internal selling price inflation of 1.5%, Pick n Pay company-owned supermarkets showed positive like-for-like volume growth during the period. Within the context of the intense pressure facing consumers, particularly since the May 2026 fuel price hikes, as well as recently reported competitor like-for-like sales growths of a similar magnitude, the company-owned supermarkets outcome is satisfactory . That said, stronger growth is required, and Pick n Pay is striving to deliver this. Franchise supermarket like-for -like sales growth was 1.0%, a slight improvement on the 0. 9% reported for full year FY26. The Group continues its efforts to improve the franchise offer to drive sales and profitability for Pick n Pay and our franchisee partners. Pick n Pay Online Pick n Pay’s online business delivered another standout performance, with H1 FY27 turnover growing 35.4%. Alongside delivering faster shopping and checkout experiences, two key launches stood out in the half: ▪ The launch of Pick n Pay Clothing in the asap! app was successful, delivering well ahead of budgeted turnover . Customers can now shop groceries and clothing within a single app, bringing more of the Pick n Pay estate into one shopping journey and making asap! a broader destination. ▪ The launch of Penny, South Africa’s first fully integrated AI-powered grocery shopping assistant, allows customers to build their asap! grocery baskets by talking, typing, or snapping a photo of a recipe, shopping list or empty pantry shelf. Penny has generated positive customer sentiment, improved order conversion and increased average order value. Pick n Pay Clothing Pick n Pay Clothing turnover in standalone stores grew 3.9%, with like-for-like sales declining 0.7%. The South African clothing market remains exceptionally challenged: within this context, Pick n Pay is encouraged by the improved like-for-like performance vs. H2 FY26, and is focussed on returning the business to positive like-for-like growth. Pick n Pay Clothing opened net 2 stores during H1 FY27 to bring the total estate to 439 stores, consisting of 421 company-owned and 18 franchise stores. Like-for-like sales growth 26 weeks H2 FY25 26 weeks H1 FY26 26 weeks H2 FY26 26 weeks H1 FY27 PnP South Africa 3.1% 4.4% 1.3% 1.4% PnP SA supermarkets 2.7% 3.7% 1.9% 1.9% PnP SA company-owned supermarkets 3.6% 4.8% 3.0% 2.4% PnP SA franchise supermarkets 1.1% 1.8% (0.2%) 1.0% PnP Clothing standalone stores 3.8% 7.5% (5.6%) (0.7%) Note: 1) PnP SA Supermarkets includes hypermarkets. 2) Franchise sales refers to wholesale sales from Pick n Pay to franchisees. Review of operations continued
Page 5
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 3 Pick n Pay segment gross profit Pick n Pay’s H1 FY27 gross profit margin increased 0.7% year-on-year to 17.5%. The improved gross profit margin was primarily due to the combined impacts of better category and margin management in South Africa and Zambia , and the corporatisation of the Botswana stores. Pick n Pay segment trading expenses H1 FY27 trading expenses increased 1.7% to R8.1 billion. On a like-for-like basis, trading expense growth was 2.0%, well below the 6.7% like-for-like expense growth reported for FY26. Employee costs – increased 2.7% to R3.4 billion. The limited increase in employee costs, despite above inflation wage increases, was primarily the result of support office savings, where there have been selective retrenchments as Pick n Pay pursues a fit-for-purpose support office structure. Occupancy costs – declined 0.4% to R1.0 billion as a result of renegotiation of some rental agreements. Occupancy was impacted by a R99 million IFRS16 profit on lease termination (R126 million in H1 FY26), which arose from store closures and conversions. Excluding this IFRS 16 profit from both periods, occupancy costs declined by 2.6%. Operations costs – increased 5.0% to R2.2 billion. Increased energy costs, including both diesel and electricity, and utility costs exerted upward pressure on operations costs when measured on a like-for-like basis. PPE depreciation and amortisation declined slightly during the period as a result of store closures and conversions in prior periods. Merchandising and administration costs – declined 5.0% to R1.4 billion as a result of multiple factors, including more cost -effective advertising and promotional spend. Expected credit loss allowance – the charge from the change in the credit loss allowance increased by R22 million to R93 million. Pick n Pay segment trading loss Pick n Pay H1 FY27 trading loss reduced to R516 million (-1.4% trading margin) from R621 million (-1.7% trading margin) in H1 FY26. The reduced trading loss was the result of 3.9% gross profit growth exceeding 1.7% trading expense growth, due to improved expense control in the period. Rm H1 FY27 H1 FY261 % change Turnover 36 369 36 392 (0.1%) Gross profit 6 373 6 132 3.9% Other income 1 233 1 232 0.1% Trading expenses (8 122) (7 985) 1.7% Employee costs (3 411) (3 320) 2.7% Occupancy costs (1 046) (1 050) (0.4%) Operations costs (2 152) (2 050) 5.0% Merchandise and admin costs (1 420) (1 494) (5.0%) Expected credit loss allowance (93) (71) 31.0% Trading loss (516) (621) (16.9%) Net lease finance expense# (560) (543) 3.1% Trading loss after lease interest* (1 076) (1 164) (7.6%) Gross profit margin 17.5% 16.8% Trading expenses as % of turnover 22.3% 21.9% Trading loss margin (1.4%) (1.7%) Trading loss after lease interest margin (3.0%) (3.2%) 1 Figures have been restated with no change to Gross profit, Trading loss, or Trading loss after lease interest. Refer to note 4 of the Group condensed interim financial statements. # As per the Statement of Comprehensive Income. Lease finance expense less lease finance income, which is income received from franchise sub-leases where the Group holds head leases. * Refer to Appendix 1 Pro forma financial information. Boxer segment operational performance Boxer, the Group’s 53.1% owned subsidiary (following the disposal of a further 12.5% of Boxer equity during May 2026) reported a solid H1 FY27 performance. As consolidated by the Group, Boxer turnover grew 6.3% to R24.1 billion, and trading profit increased 8.1% to R1.0 billion. The full H1 FY27 Boxer results, as published by Boxer Retail Limited on 12 October 2026, can be found on the Boxer website at https://boxerinvestor.co.za/ . Review of operations continued
Page 6
www.pnp.co.za 4 Group net finance costs Group net finance costs, including implied interest charges under IFRS 16, increased by 0.3% year-on-year. Pick n Pay segment net finance costs increased 0.3% to R397 million, while Boxer net finance costs increased 0.4% to R232 million. Funding interest – Group net funding interest income grew 33.1% to R193 million, with both Pick n Pay and Boxer showing substantial improvement as a result of healthy cash positions. Lease interest – I m p l i e d n e t i n t e r e s t c h a r g e s u n d e r I F R S 1 6 increased 6.5% year-on-year to R822 million. The increase was driven by the store rollout in Boxer (lease interest up 14.4%), with net lease interest in the Pick n Pay segment up 3.1%. Net finance costs (Rm) H1 FY27 H1 FY26 % change Group (629) (627) 0.3% Net funding interest1 193 145 33.1% Net lease interest2 (822) (772) 6.5% Pick n Pay (397) (396) 0.3% Net funding interest 163 147 10.9% Net lease interest (560) (543) 3.1% Boxer (232) (231) 0.4% Net funding interest 30 (2) >100% Net lease interest (262) (229) 14.4% 1 Net funding interest includes interest received on trade and other receivables of R37 million and R36 million in H1 FY27 and H1 FY26 respectively, which is primarily interest income on overdue franchise receivables within the Pick n Pay segment. 2 As per the Statement of Comprehensive Income. Lease liability finance costs less net investment in lease receivables finance income, which is income received from sub-leases where the Group holds head leases. Group capital items The Group recorded an H1 FY27 capital profit of R14 million, vs. an R84 million capital loss in H1 FY26. R11 million of the capital gain was recorded within the Pick n Pay segment, while R3 million related to Boxer. The Group capital gain reflected a R99 million profit on disposal of assets, mostly resulting from the sale of two properties, together with a R85 million asset impairment. Group tax The Group’s effective tax rate reflects the combined effects of a 32.9% and 27.0% effective tax rate within the Pick n Pay segment and Boxer respectively. The Group expects to pay minimal tax in the Pick n Pay segment for the foreseeable future, given the accumulated tax losses. Earnings per share The H1 FY27 Group attributable loss reduced by R226 million to R270 million, while the Headline loss reduced by R140 million to R299 million. The Boxer non-controlling interest increased from 34.4% to 46.9% during May 2026. As a consequence of this increase and Boxer’s organic earnings growth, the Rand value of the non-controlling interest on Group attributable earnings increased by 34.1% year- on-year to R232 million. The relatively high value of the non- controlling interest means that it has a material impact on the calculation of Group attributable earnings. Headline earnings per share (HEPS) – The Headline loss per share reduced by 31.9% to a loss of 40.71 cents per share. All impairment losses and other capital items are excluded from the calculation of headline earnings. Earnings per share (EPS) – The loss per share reduced by 45.6% to a loss of 36.77 cents per share, and includes all items of a capital nature. Detailed review of Group financial position Funding Group net cash (excluding leases) at period-end was R10.0 billion, including R7.7 billion of net cash within Pick n Pay and R2.3 billion of net cash within Boxer. Group net cash increased by R6.9 billion since FY26 year-end, including a R1.6 billion increase within Boxer, and a R5.3 billion increase within the Pick n Pay segment. Pick n Pay raised R4.7 billion gross cash proceeds from the placement of the 12.5% Boxer equity shareholding. Excluding the gross proceeds from this capital raise, Pick n Pay segment’s net cash increased by R0.6 billion during H1 FY27, of which R232 million was the Boxer FY26 final dividend. The Pick n Pay segment has R3.0 billion unsecured short-term working capital facilities in place to fund intra-month working capital requirements where necessary. Funding (Rm) H1 FY27 FY26 H1 FY26 Group gross debt (excluding leases) – (200) (650) Group cash and cash equivalents 9 982 3 277 5 713 Group net cash 9 982 3 077 5 063 Pick n Pay net cash 7 671 2 368 3 937 Boxer net cash 2 311 709 1 126 Review of operations continued Group trading profit segmentation H1 FY27 H1 FY26 Pick n Pay Boxer Group Pick n Pay Boxer Group Turnover 36 369 24 094 60 463 36 392 22 656 59 048 Trading (loss)/profit (516) 1 006 490 (621) 931 310 Trading (loss)/profit margin (1.4%) 4.2% 0.8% (1.7%) 4.1% 0.5% Net lease finance expense# (560) (262) (822) (543) (229) (772) Trading (loss)/profit after lease interest* (1 076) 744 (332) (1 164) 702 (462) Trading (loss)/profit after lease interest margin (3.0%) 3.1% (0.5%) (3.2%) 3.1% (0.8%) # As per the Statement of Comprehensive Income. Lease finance expense less lease finance income, which is income received from franchise sub-leases where the Group holds head leases. * Refer to Appendix 1 Pro forma financial information.
Page 7
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 5 Working capital At the Group level, working capital released R2.7 billion of liquidity in H1 FY27. This included a R1.4 billion liquidity release within Pick n Pay and a R1.3 billion release within Boxer. The liquidity release is attributed to the following: ▪ Normal seasonality, where both Pick n Pay and Boxer ordinarily release liquidity in H1 and absorb liquidity in H2; ▪ A payables cut-off impact at the end of the period; ▪ Tight working capital controls within Pick n Pay, where inventory declined R225 million vs. H1 FY26, despite investment in inventory range. Net working capital movement (Rm) H1 FY27 H1 FY26 Pick n Pay 1 372 712 Boxer 1 289 1 040 Group liquidity release 2 661 1 752 Group capital investment Group H1 FY27 net capital investment (i.e. net of proceeds from asset disposals) of R0.7 billion compared with R0.9 billion in H1 FY26. Within the Pick n Pay segment, net capital investment increased by 5.5% to R364 million. This reflected gross capital investment of R583 million (up 20.0% vs. R 486 million in H1 FY26) less R219 million proceeds from disposal of assets . Capital investment within the Pick n Pay segment is ramping up as select supermarkets are revamped in order to improve the quality of the store estate. Group gross capital investment for the FY27 financial year is expected to be approximately R 2.8 billion, including R 1.7 billion for Pick n Pay and R1.1 billion for Boxer. Net capital investment (Rbn) H1 FY27 H1 FY26 Pick n Pay 0.4 0.4 Boxer 0.3 0.5 Group 0.7 0.9 Shareholder distribution As a result of the headline loss incurred, the Board has not declared a dividend, and does not expect to declare any dividends until the Group has returned to long-term sustainability. Subsequent event: successful agreement reached on restructure of the store labour model The Group is pleased to announce the successful conclusion and withdrawal of the Section 189A consultation process initiated in May 2026. The agreement reached with our labour partners delivers the flexibility, efficiency and market alignment sought by the the Group ’s Pick n Pay segment at the commencement of the process. It introduces a simplified and more competitive store labour model that supports more flexible and effective labour scheduling, improved cost management and a stronger long-term position for Pick n Pay ’s core supermarket business. The Group acknowledges the constructive and respectful manner in which our labour partners and employee representatives engaged throughout the process. Together with Pick n Pay ’s broader turnaround initiatives, this is a critical step in the journey to profit break-even and long-term sustainability. Group strategic plan and outlook The Group faced a challenging external environment in H1 FY27, given the impact of increased fuel prices from May 202 6 on both our customer’s wallets and our cost base. Despite this, both Pick n Pay and Boxer managed to deliver improved results on a year-on-year basis. While the Pick n Pay segment delivered a reduced loss, the R1.1 billion loss at the trading profit after lease interest level indicates that substantial further profitability improvement must still be delivered to return Pick n Pay to a sustainable basis. The customer experience is being substantially improved, and this is supporting our like-for-like sales growth. The initial benefits of the turnaround elements that have already been put in place are beginning to show in the financial results, with gross profit margin steadily recovering and trading expense growth contained. Significant further benefits are set to flow over the coming two and a half years, as we approach our FY29 trading profit after lease interest break -even target. Ongoing elevated oil prices and the consequent impacts on food inflation, logistical costs and the ability of the consumer to spend mean that visibility on the trading outlook for the remainder of FY27 is low. Given this, the Group continues to focus on operating levers within our control, where we have substantial opportunity. In the 4 weeks post period-end, the Pick n Pay segment’s South African supermarket like-for-like sales growth was slightly ahead of that achieved in H1 FY27. We thank all Boxer and Pick n Pay colleagues, and our valued franchise partners, for their commitment and contribution as we rebuild and re-energise the Group for a prosperous future. James Formby Sean Summers Chair Chief Executive Officer 26 October 2026 Review of operations continued
Page 8
www.pnp.co.za 6 7 Statement of comprehensive income 8 Statement of financial position 9 Statement of changes in equity 10 Statement of cash flows 11 Notes to the financial statements Group condensed interim financial statements 1 Basis of preparation and accounting policies 2 Revenue 3 Basic, headline and diluted earnings per share 4 Operating Segments 5 Purchase of operations 6 Non-current assets held for sale 7 Related party transactions and balances 8 Share Capital 9 Treasury shares 10 Financial instruments 11 Contingent liabilities 12 Commitments 13 Significant items 14 Subsequent events
Page 9
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 7 Group statement of comprehensive income for the period ended Note Unaudited 26 weeks to 30 August 2026 Rm Restated* Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm Revenue 2 62 265 60 765 123 674 Turnover 2 60 463 59 048 120 290 Cost of merchandise sold (49 112) (48 336) (97 672) Gross profit 11 351 10 712 22 618 Other income 1 493 1 425 2 862 Franchise fee income 2 553 582 1 173 Operating lease income 2 59 56 93 Commissions, dividends and other income 2 881 787 1 596 Trading expenses (12 354) (11 827) (23 795) Employee costs (5 250) (5 006) (10 009) Occupancy costs (1 726) (1 684) (3 456) Operations costs (3 440) (3 200) (6 423) Merchandising and administration costs (1 845) (1 866) (3 677) Expected credit loss allowance (93) (71) (230) Trading profit 490 310 1 685 Finance income 2 309 292 522 Funding finance income 207 191 307 Leases finance income 102 101 215 Finance costs (938) (919) (1 847) Funding finance expense (14) (46) (69) Leases finance expense (924) (873) (1 778) (Loss)/profit before tax before capital items (139) (317) 360 Profit/(loss) on capital items 14 (84) (442) Net profit/(loss) on disposal of assets 99 (39) (51) Loss from impairments of assets (85) (45) (391) Loss before tax (125) (401) (82) Tax 87 78 (111) Loss for the period (38) (323) (193) Attributable to: Equity holders of the parent (270) (496) (728) Non-controlling interest 232 173 535 Other comprehensive income, net of tax Items that will not be reclassified to profit or loss – 4 14 Remeasurement of retirement scheme assets – 6 19 Tax on items that will not be reclassified to profit or loss – (2) (5) Items that may be reclassified to profit or loss (4) 2 (6) Foreign currency translations (5) 4 (3) Movement in cash flow hedge 1 (2) (3) Total comprehensive loss for the period (42) (317) (185) Attributable to: Equity holders of the parent (274) (490) (720) Non-controlling interest 232 173 535 Earnings per share Cents Cents Cents Basic loss per share 3 (36.77) (67.53) (99.17) Diluted loss per share 3 (36.77) (67.53) (99.17) * In line with the restatement presented in the Group annual financial statements for the 52 weeks ended 1 March 2026, the Group condensed interim financial statements have also been restated to correct for certain product articles where system mapping erroneously resulted in turnover being presented within the incorrect financial statement lines. The reclassification increased revenue, turnover and cost of merchandise sold by R230 million, for the 26 weeks ended 31 August 2025, with no impact on previously reported gross profit, and decreased revenue, ‘commissions, dividend and other income’ and ‘merchandise and administration costs’ by R64 million, with no impact on previously reported trading profit, for the same period.
Page 10
www.pnp.co.za 8 Group statement of financial position Note Unaudited As at 30 August 2026 Rm Unaudited As at 31 August 2025 Rm Audited As at 1 March 2026 Rm ASSETS Non-current assets Property, plant and equipment 8 915 8 808 8 965 Right-of-use assets 11 157 10 831 10 779 Intangible assets 1 300 1 333 1 192 Net investment in lease receivables 1 682 1 834 1 795 Deferred tax assets 2 714 3 092 3 236 Trade and other receivables 50 18 14 Loans 132 130 128 Retirement scheme assets 6 65 6 Investment in insurance cell captive 10 87 93 79 Operating lease assets 3 4 3 26 046 26 208 26 197 Current assets Inventory 11 108 10 729 11 733 Right-of-return assets 14 24 22 Trade and other receivables 3 885 4 220 3 798 Net investment in lease receivables 312 356 334 Loans 12 15 14 Cash and cash equivalents 9 982 5 713 3 277 25 313 21 057 19 178 Non-current asset held for sale 6 – 122 122 Total assets 51 359 47 387 45 497 EQUITY AND LIABILITIES Equity Share capital 8 3 883 3 883 3 883 Treasury shares 9 (507) (585) (507) Other reserves – (2) (2) Foreign currency translation reserve (405) (393) (400) Retained earnings 9 538 6 830 6 588 Equity attributable to equity holders of parent 12 509 9 733 9 562 Non-controlling interest 1 605 835 1 144 Total equity 14 114 10 568 10 706 Non-current liabilities Lease liabilities 15 987 15 930 15 883 Borrowings – 650 200 Deferred tax liabilities 70 78 71 16 057 16 658 16 154 Current liabilities Trade and other payables 17 332 16 705 15 326 Deferred revenue 550 527 377 Provisions 76 107 71 Lease liabilities 2 730 2 687 2 652 Current tax liabilities 500 134 209 Derivative financial instruments 10 – 1 2 21 188 20 161 18 637 Total equity and liabilities 51 359 47 387 45 497
Page 11
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 9 Group statement of changes in equity for the period ended Unaudited Note Share capital Rm Treasury shares Rm Retained earnings Rm Other reserves Rm Foreign currency translation reserve Rm Equity attributable to equity holders of parent Rm Non– controlling interest Rm Total equity Rm At 2 March 2025 3 883 (496) 7 301 6 (397) 10 297 668 10 965 Total comprehensive (loss)/ income for the period – – (492) (2) 4 (490) 173 (317) (Loss)/income for the period – – (496) – – (496) 173 (323) Foreign currency translations – – – – 4 4 – 4 Movement in cash flow hedge – – – (2) – (2) – (2) Remeasurement of retirement scheme assets – – 4 – – 4 – 4 Other reserve movements – – – (6) – (6) – (6) Transactions with owners – (89) 21 – – (68) (6) (74) Shares purchased during the period 9 – (101) – – – (101) – (101) Purchase of non-controlling interest# – – (39) – – (39) (21) (60) Net effect of settlement of employee share awards – 12 (12) – – – – – Share-based payments – – 72 – – 72 15 87 At 31 August 2025 3 883 (585) 6 830 (2) (393) 9 733 835 10 568 Total comprehensive (loss)/ income for the period – – (222) (1) (7) (230) 362 132 (Loss)/income for the period – – (232) – – (232) 362 130 Foreign currency translations – – – – (7) (7) – (7) Movement in cash flow hedge – – – (1) – (1) – (1) Remeasurement of retirement scheme assets – – 10 – – 10 – 10 Other reserve movements – – – 1 – 1 – 1 Transactions with owners – 78 (20) – – 58 (53) 5 Net effect of settlement of employee share awards – 78 (78) – – – – – Dividends paid – – – – – – (71) (71) Share-based payments – – 58 – – 58 18 76 As at 1 March 2026 3 883 (507) 6 588 (2) (400) 9 562 1 144 10 706 Total comprehensive (loss)/ income for the period – – (270) 1 (5) (274) 232 (42) (Loss)/income for the period – – (270) – – (270) 232 (38) Foreign currency translations – – – – (5) (5) – (5) Movement in cash flow hedge – – – 1 – 1 – 1 Other reserve movements – – – 1 – 1 – 1 Transactions with owners – – 3 220 – – 3 220 229 3 449 Purchase of non-controlling interest# – – (45) – – (45) (40) (85) Net proceeds from change of ownership interest in subsidiary 13 – – 3 205 – – 3 205 452 3 657 Dividends paid – – – – – – (204) (204) Share-based payments – – 60 – – 60 21 81 At 30 August 2026 3 883 (507) 9 538 – (405) 12 509 1 605 14 114 # Purchase of non-controlling interest shares by Boxer Retail Limited Group (‘Boxer’) for Long Term Incentive Plan (‘L TIP’).
Page 12
www.pnp.co.za 10 Group statement of cash flows for the period ended Note Unaudited 26 weeks to 30 August 2026 Rm Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm Cash flows from operating activities Trading profit 490 310 1 685 Adjusted for dividend income 2 – – (25) Adjusted for non-cash items 1 899 1 838 3 800 Depreciation of property, plant and equipment 755 729 1 469 Depreciation of right-of-use assets 1 162 1 130 2 298 Amortisation of intangible assets 59 61 123 Share-based payments 81 87 163 Profit on termination of leases (126) (139) (295) Other lease adjustments (23) (9) (19) Movement in operating lease assets – 1 2 Movement in retirement scheme assets – – 72 Fair value and foreign exchange adjustments (9) (22) (13) Cash generated before movements in working capital 2 389 2 148 5 460 Movements in working capital 2 661 1 752 (403) Movements in trade and other payables, provisions and deferred revenue 2 184 1 801 249 Movements in inventory and right-of-return assets 696 (34) (1 013) Movements in trade and other receivables (219) (15) 361 Cash generated from trading activities 5 050 3 900 5 057 Funding interest received 201 187 312 Funding interest paid (14) (46) (69) Interest received on net investment in lease receivables 103 113 228 Interest paid on lease liabilities (981) (955) (1 791) Cash generated from operations 4 359 3 199 3 737 Dividends received – – 25 Dividends paid (204) – (71) Tax paid (107) (272) (534) Cash generated from operating activities 4 048 2 927 3 157 Cash flows from investing activities Investment in intangible assets (69) (47) (69) Investment in property, plant and equipment (710) (897) (1 925) Purchase of operations 5 (124) (81) (89) Proceeds on disposal of fixed assets# 225 143 163 Principal net investment in lease receipts 171 184 360 Lease incentives received 60 68 155 Loans repaid 34 22 44 Loans advanced (13) (5) (30) Cash utilised in investing activities (426) (613) (1 391) Cash flows from financing activities Principal lease liability payments (1 293) (1 263) (2 684) Repayment of borrowings (200) (200) (650) Share purchases 9 – (101) (101) Net proceeds from change of ownership interest in subsidiary 13 4 664 – – Purchase of non-controlling interest shares by Boxer for L TIP (85) (60) (60) Cash generated/(utilised) from financing activities 3 086 (1 624) (3 495) Net increase/(decrease) in cash and cash equivalents 6 708 690 (1 729) Net cash and cash equivalents at beginning of period 3 277 5 028 5 028 Foreign currency translations (3) (5) (22) Net cash and cash equivalents at end of period 9 982 5 713 3 277 # Includes ‘property, plant and equipment’, ‘intangible assets’, and ‘non-current assets held for sale’. Proceeds on disposals of fixed assets have been aggregated for the current period to align with the audited Group annual financial statements for the 52 weeks ended 1 March 2026. Comparatives have been amended for comparability purposes.
Page 13
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 11 Notes to the financial statements for the period ended 30 August 2026 1 Basis of preparation and accounting policies The Group condensed interim financial statements for the period ended 30 August 2026 are prepared in accordance with the requirements of the JSE Listings Requirements for condensed reports, and the requirements of the Companies Act, as applicable to summarised financial statements. The Listings Requirements require condensed reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (‘IFRS Accounting Standards’), as issued by the International Accounting Standards Board, and the financial pronouncements, as issued by the Financial Reporting Standards Council and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting . The Group condensed interim financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the audited Group annual financial statements for the 52 weeks ended 1 March 2026. The accounting policies applied in the preparation of the Group condensed interim financial statements are in terms of IFRS Accounting Standards and are consistent with those applied in the financial statements for the 52 weeks ended 1 March 2026, with the exception of the adoption of new, revised and amended accounting pronouncements as issued by the International Accounting Standards Board (‘IASB’) which were effective for the Group from 1 March 2026. The new , revised and amended standards did not have a material impact on the Group condensed interim financial statements. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. These Group condensed interim financial statements have been prepared by the Finance Division under the supervision of the Chief Finance Officer, Tina Rookledge CA(SA), and have not been audited or reviewed by the Group’s external auditors, Ernst & Young Inc. Unaudited 26 weeks to 30 August 2026 Rm Restated* Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm 2 Revenue Revenue from contracts with customers 61 897 60 417 123 034 Turnover 60 463 59 048 120 290 Franchise fee income 553 582 1 173 Commissions and other income 881 787 1 571 Operating lease income 59 56 93 Dividend income from investment in insurance cell captive – – 25 Finance income 309 292 522 Bank balances and investments 170 155 242 Trade receivables and other 37 36 65 Net investment in lease receivables 102 101 215 62 265 60 765 123 674 * Comparative figures have been restated. Refer to the Group Statement of Comprehensive income.
Page 14
www.pnp.co.za 12 Unaudited 26 weeks to 30 August 2026 Cents per share Unaudited 26 weeks to 31 August 2025 Cents per share Audited 52 weeks to 1 March 2026 Cents per share 3 Basic, headline and diluted earnings per share Basic loss per share (36.77) (67.53) (99.17) Diluted loss per share (36.77) (67.53) (99.17) Headline loss per share (40.71) (59.77) (52.58) Diluted headline loss per share (40.71) (59.77) (52.58) Rm Rm Rm 3.1 Reconciliation between basic and headline earnings Loss for the period attributable to equity holders of parent – basic earnings for the period (270) (496) (728) Adjustments: (29) 57 342 (Profit)/loss on disposal of assets (99) 39 51 Tax effect of disposal of assets 5 (10) (12) Loss from impairments of assets 85 45 391 Tax effect of impairments of assets (21) (11) (75) Non-controlling interest 1 (6) (13) Headline loss for the period (299) (439) (386) 000’s 000’s 000’s 3.2 Number of ordinary shares Number of ordinary shares in issue 745 657 745 657 745 657 Weighted average number of ordinary shares in issue (excluding treasury shares) 734 383 734 526 734 125 Diluted weighted average number of ordinary shares in issue 734 383 734 526 734 125 Notes to the financial statements continued
Page 15
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 13 4 Operating segments Operating segments are identified based on financial information regularly reviewed by the Chief Operating Decision Maker (CODM) of the Group, for performance assessments and resource allocations. The Group annually performs a detailed review of the executive, or group of executives, that could be considered the appropriate and relevant CODM of the Group. During the current and prior periods under review, the CODM of the Group consisted of the Group executive directors, which comprised of the Chief Executive Officer and Chief Finance Officer. Segmental trading loss/profit is the reported measure used for evaluating the performance of the Group’s operating segments. This metric is equal to the Group’s reported “loss/profit before tax”, before net finance costs and capital items. Reportable segments Unaudited 26 weeks to 30 August 2026 Pick n Pay Rm Boxer Rm Group Rm Financial performance Revenue 37 872 24 393 62 265 Turnover 36 369 24 094 60 463 Cost of merchandise sold (29 996) (19 116) (49 112) Gross profit 6 373 4 978 11 351 Other income 1 233 260 1 493 Franchise fee income 553 – 553 Operating lease income 54 5 59 Commissions and other income 626 255 881 Trading expenses (8 122) (4 232) (12 354) Employee costs (3 411) (1 839) (5 250) Occupancy costs (1 046) (680) (1 726) Operations costs (2 152) (1 288) (3 440) Merchandise and administration costs (1 420) (425) (1 845) Expected credit loss allowance (93) – (93) Trading (loss)/profit (516) 1 006 490 Finance income 270 39 309 Funding finance income 168 39 207 Leases finance income 102 – 102 Finance costs (667) (271) (938) Funding finance expense (5) (9) (14) Leases finance expense (662) (262) (924) (Loss)/profit before tax before capital items (913) 774 (139) Profit on capital items 11 3 14 Net profit on disposal of assets 82 17 99 Loss from impairments of assets (71) (14) (85) (Loss)/profit before tax (902) 777 (125) Included in (loss)/profit before tax is the following: Depreciation and amortisation (1 242) (734) (1 976) Net funding finance income 163 30 193 Net leases finance expense (560) (262) (822) Financial position Total assets 35 444 15 915 51 359 Total liabilities 24 754 12 491 37 245 Geographical information South Africa Rm Rest of Africa Rm Group Rm Financial performance Turnover 58 399 2 064 60 463 Pick n Pay 34 687 1 682 36 369 Boxer 23 712 382 24 094 Franchise fee income 547 6 553 Operating lease income 59 – 59 Commissions and other income 880 1 881 Finance income 308 1 309 Revenue 60 193 2 072 62 265 Financial position Non-current assets 20 856 519 21 375 The Pick n Pay segment earned dividends from the Boxer segment of R232 million (31 August 2025: Rnil), which is removed on consolidation and not included in the disclosures above. Notes to the financial statements continued
Page 16
www.pnp.co.za 14 4 Operating segments continued Reportable segments Unaudited 26 weeks to 31 August 2025 Restated # Pick n Pay Rm Restated # Boxer Rm Restated # Group Rm Financial performance Revenue 37 873 22 892 60 765 Turnover 36 392 22 656 59 048 Cost of merchandise sold (30 260) (18 076) (48 336) Gross profit 6 132 4 580 10 712 Other income 1 232 193 1 425 Franchise fee income 582 – 582 Operating lease income 51 5 56 Commissions and other income 599 188 787 Trading expenses (7 985) (3 842) (11 827) Employee costs (3 320) (1 686) (5 006) Occupancy costs (1 050) (634) (1 684) Operations costs (2 050) (1 150) (3 200) Merchandise and administration costs (1 494) (372) (1 866) Expected credit loss allowance (71) – (71) Trading (loss)/profit (621) 931 310 Finance income 249 43 292 Funding finance income 148 43 191 Leases finance income 101 – 101 Finance costs (645) (274) (919) Funding Finance expense (1) (45) (46) Lease finance expense (644) (229) (873) (Loss)/profit before tax before capital items (1 017) 700 (317) Loss on capital items (64) (20) (84) Net loss on disposal of assets (24) (15) (39) Loss from impairments of assets (40) (5) (45) (Loss)/profit before tax (1 081) 680 (401) Included in (loss)/profit before tax is the following: Depreciation and amortisation (1 244) (676) (1 920) Net funding finance income/(expense) 147 (2) 145 Net leases finance expense (543) (229) (772) Financial position Total assets 32 927 14 460 47 387 Total liabilities 24 787 12 032 36 819 Geographical information Restated # South Africa Rm Restated # Rest of Africa Rm Restated # Group Rm Financial Performance Turnover 57 211 1 837 59 048 Pick n Pay 34 874 1 518 36 392 Boxer 22 337 319 22 656 Franchise fee income 575 7 582 Operating lease income 56 – 56 Commissions and other income 782 5 787 Finance income 280 12 292 Revenue 58 904 1 861 60 765 Financial position Non-current assets*^ 20 521 577 21 098 # In line with the restatement presented in the Group annual financial statements for the 52 weeks ended 1 March 2026, the Group condensed interim financial statements have also been restated to correct for certain product articles where system mapping erroneously resulted in turnover being presented within the incorrect financial statement lines. The reclassification increased Group revenue, turnover and cost of merchandise sold by R230 million and Pick n Pay, Pick n Pay South Africa, Pick n Pay Rest of Africa, Boxer, Boxer South Africa and Boxer Rest of Africa by R92 million, R86 million, R6 million, R138 million, R137 million, R1 million, respectively, for the 26 weeks ended 31 August 2025, with no impact on previously reported gross profit. The reclassification also reduced the Group revenue, ‘commissions and other income’, and ‘merchandising and administration costs’ by R64 million, within the Pick n Pay (South Africa) segment, with no impact on previously reported trading profit, for the same period. * Goodwill of R195 million, relating to the acquisition of the Botswana franchise operations in the prior period, has been reclassified from South Africa to Rest of Africa to align with the classification in the current period and the audited Group annual financial statements for the 52 weeks ended 1 March 2026. ^ Non-current assets consists of property, plant and equipment, right-of-use assets, intangible assets, operating lease assets and non-current asset held for sale. Comparatives have been amended for comparability. Notes to the financial statements continued
Page 17
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 15 5 Purchase of operations 5.1 Acquisition of stores During the period under review, the Group acquired 10 operations (31 August 2025: 3 operations) none of which was individually material to the Group. These acquisitions were accounted for in terms of IFRS 3 Business Combinations and any goodwill arising from these acquisitions represents the value creation that the Group expects to realise in the future. Any pre-existing contractual relationships were treated as effectively settled at the acquisition date. The effective settlement of pre-existing lease arrangements was measured at the present value of the remaining lease payments (as defined in IFRS 16 Leases) as if the acquired leases were new at acquisition date. The results of these acquisitions are presented below. Unaudited 26 weeks to 30 August 2026 Rm Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm The net assets arising from acquisitions were as follows: Identifiable net assets Property, plant and equipment 58 8 18 Intangible assets 16 – – Right-of-use assets 128 – – Inventory 62 34 56 Lease liabilities (23) – – Total identifiable net assets at fair value 241 42 74 Goodwill Consideration for acquisitions at fair value 340 137 192 Cash purchase price 240 137 192 Effective settlement of pre-existing lease arrangements 100 – – Less: total identifiable net assets at fair value (241) (42) (74) Goodwill acquired 99 95 118 Net cash paid in respect of acquisitions Purchase price of acquisitions at fair value 240 137 192 Less: amounts net settled against trade and other receivables (116) (69) (116) 124 68 76 Less: cash acquired – – – Net cash paid 124 68 76 These acquisitions contributed revenue of R315 million to the Group statement of comprehensive income for the period under review. Had the acquisitions been at the beginning of the reporting period, Group revenue would have remained at R62.3 billion. These acquisitions had no significant impact on the loss for the period, nor would the impact have been significant had the acquisition been at the beginning of the reporting period. 5.2 Purchase of Botswana franchisees During the prior year, the Group acquired the Pick n Pay franchise operations in Botswana through the purchase of 100% of the share capital of NTS Holdings Proprietary Limited for a total consideration of R236 million of which R36 million was a cash consideration and R200 million an effective settlement of pre-existing arrangements. The Botswana franchise operations, comprising 13 supermarkets and 6 liquor stores, had a total fair value of identifiable net assets of R41 million. The acquisition resulted in the Group recognising goodwill of R195 million, with net cash of R13 million having been paid. Subsequent to acquisition, the Group recognised an impairment loss of R85 million relating to this Goodwill for the 52 weeks ended 1 March 2026. For further information, refer to note 21.2 of the 2026 audited Group annual financial statements. 5.3 Goodwill During the period under review, the Group’s carrying value of Goodwill increased with a cost of R99 million as a result of the store purchases, with no impairment losses or disposals for the period. 6 Non-current assets held for sale During the period, the Group sold all properties previously classified as a non-current asset held for sale. As at 1 March 2026, these properties had a carrying value of R122 million. A profit on disposal of R96 million was recorded in the capital items section of the statement of comprehensive income for the 26 weeks ended 30 August 2026. 7 Related party transactions and balances During the period under review, in the ordinary course of business, certain companies within the Group entered into transactions with each other. These intragroup transactions and related balances are eliminated on consolidation, including: ▪ R282 million (31 August 2025: R346 million) owing to Boxer Retail Limited Group (‘Boxer’) as a result of a shared payments system infrastructure, whereby payments are received by the Group and fully settled to Boxer the following day, and ▪ R232 million (31 August 2025: Rnil) dividends received by the Pick n Pay segment from Boxer. Intragroup transactions are similar to those in the prior year and related parties remain unchanged from those reported at 1 March 2026. For further information, refer to note 7 of the 2026 audited Group annual financial statements and note 7 of the 2026 audited Company annual financial statements. Notes to the financial statements continued
Page 18
www.pnp.co.za 16 Unaudited 26 weeks to 30 August 2026 000’s Unaudited 26 weeks to 31 August 2025 000’s Audited 52 weeks to 1 March 2026 000’s 8 Share capital 8.1 Ordinary share capital Authorised ordinary shares of no par value 828 500 828 500 828 500 Issued ordinary shares of no par value 745 657 745 657 745 657 The number of shares in issue is made up as follows: Treasury shares (note 9) 11 273 13 273 11 273 Shares held outside the Group 734 384 732 384 734 384 Total shares in issue at end of period 745 657 745 657 745 657 Rm Rm Rm Issued share capital 3 883 3 883 3 883 The holders of ordinary shares are entitled to receive dividends as and when declared, and are entitled to one vote per share at meetings of the Company. Certain ordinary shares are stapled to B shares and are subject to restrictions upon disposal. Refer to note 8.2. The Company can issue new shares to settle the Group’s obligations under its employee share schemes, but issues in this regard are limited to 24 672 516 (2025: 24 672 516) shares. To date 15 743 000 (2025: 15 743 000) shares have been issued, resulting in 8 929 516 (2025: 8 929 516) shares remaining for this purpose. Unaudited 26 weeks to 30 August 2026 000’s Unaudited 26 weeks to 31 August 2025 000’s Audited 52 weeks to 1 March 2026 000’s 8.2 B share capital Authorised unlisted, non-convertible, non-participating, no par value B shares 256 314 361 500 361 500 Issued unlisted, non-convertible, non-participating, no par value B shares 220 240 325 426 325 426 The holders of B shares are not entitled to any rights to distributions by the Company or any other economic benefits. B shares are stapled to certain ordinary shares, constituting a B-share ratio for every one stapled ordinary Share. B shares cannot be traded separately from stapled ordinary shares, and together are subject to restrictions upon disposal. During the 2026 financial year, Ackerman Investment Holdings (RF) Proprietary Limited and its related and inter-related persons (collectively, the ‘Ackerman Family’) disposed of 64 038 857 ordinary shares. Consequently, the 105 186 279 B shares previously attached to these ordinary shares became unstapled and ceased to carry voting rights. In the current period under review, following shareholder approval obtained at the 2026 Annual General Meeting on 6 August 2026, the Company repurchased these unstapled B shares at a nominal value of R0.00001 per B share and cancelled them in accordance with the provisions of the Memorandum of Incorporation (MOI) reducing the number of authorised and issued B shares. Unaudited 26 weeks to 30 August 2026 Rm Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm 9 Treasury shares At beginning of period 507 496 496 Shares purchased during the period – 101 101 Settlement of employee share awards – (12) (90) At end of period 507 585 507 000’s 000’s 000’s The movement in the number of treasury shares held is as follows: At beginning of period 11 273 9 945 9 945 Shares purchased during the period – 3 822 3 822 Shares delivered to participants of restricted share plan – (494) (2 494) At end of period 11 273 13 273 11 273 Notes to the financial statements continued
Page 19
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 17 10 Financial instruments All financial instruments held by the Group are measured at amortised cost, with the exception of financial instruments at fair value through profit or loss and derivatives designated as hedging instruments, as set out below: Unaudited 26 weeks to 30 August 2026 Rm Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm Financial instruments at fair value through profit or loss Investment in insurance cell captive – Level 2 87 93 79 Derivative financial instruments (designated as hedging instruments) Forward exchange contract liabilities – Level 2 – 1 2 The fair value of these financial instruments is determined by using valuation techniques, consistent with those disclosed in the 2026 audited Group annual financial statements and remain level 2 instruments. The carrying value of all other financial instruments held at amortised cost approximate their fair value. There have been no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. Transfers between levels of the fair value hierarchy are recognised when there is a change in the observability of inputs used in the fair value measurement. 11 Contingent liabilities Contingent liabilities relating to uncertain tax positions amount to Rnil (1 March 2026: R157 million) (31 August 2025: R135 million) following the successful resolution of the uncertain tax position, which had been adequately provided for. Unaudited 26 weeks to 30 August 2026 Rm Unaudited 26 weeks to 31 August 2025 Rm Audited 52 weeks to 1 March 2026 Rm 12 Commitments Authorised capital expenditure Contracted for 1 087 570 470 Not contracted for 705 600 2 340 Total commitments 1 792 1 170 2 810 13 Significant items Reduction of shareholding in Boxer Retail Limited During May 2026, the Group disposed of 57.3 million Boxer Retail Limited (‘Boxer’) shares through an accelerated book build offering (the ‘transaction’) . The disposal generated gross proceeds of R4.7 billion and net proceeds of R3.7 billion, with R36 million transaction costs incurred and non-cash tax expense of R1.0 billion. The transaction reduced the Group’s shareholding in Boxer from 65.6% to 53.1%, with Boxer remaining a consolidated subsidiary of the Group. As a result of the Group retaining control of Boxer, this has been accounted for as an equity transaction with Non-Controlling Interest (‘NCI’), resulting in the following for the Group: Rm Proceeds for change in ownership interest, net of related transaction costs and tax 3 657 Net assets attributable to NCI (452) Increase in equity attributable to parent (recognised in retained earnings) 3 205 14 Subsequent events Process in terms of s189A of the Labour Relations Act During October 2026, the Group’s Pick n Pay segment successfully reached agreement on the restructure of the store labour model and the withdrawal of the Section 189 A consultation process. The agreement had no impact on financial information reported for the period under review. Notes to the financial statements continued
Page 20
www.pnp.co.za 18 Appendix 1 Pro forma financial information Certain financial information presented in the Group condensed interim financial statements constitutes pro forma financial information in terms of the JSE Listings Requirements. The pro forma financial information has been prepared to illustrate the additional financial measures regularly used by the management of the Group to assess operating performance and financial position, and thereby enhances an investor’s understanding of the Group’s results of operations and financial performance. The pro forma financial information is prepared for illustrative purposes only and because of its nature, may not fairly present the Group’s financial position, changes in equity, results of operations or cash flows. The directors of the Company are responsible for the pro forma financial information, which has been presented in accordance with the JSE Listings Requirements. The pro forma financial information has not been audited by the Group’s external auditors. 1 Net cash/debt (excluding lease liabilities) and Net cash/debt (including lease liabilities) Net cash/debt (excluding lease liabilities) and net cash/debt (including lease liabilities) for the Group on a historical basis for each of the periods indicated is calculated as presented in the following table. 26 weeks to 30 August 2026 26 weeks to 31 August 2025 52 weeks to 1 March 2026 Pick n Pay* Rm Boxer* Rm Group** Rm Pick n Pay* Rm Boxer* Rm Group** Rm Pick n Pay* Rm Boxer* Rm Group** Rm Cash and cash equivalents 7 953 2 029 9 982 4 283 1 430 5 713 2 739 538 3 277 Intragroup receivable/(payable)# (282) 282 – (346) 346 – (371) 371 – Borrowings – – – – (650) (650) – (200) (200) Net cash/(debt) excluding lease liabilities 7 671 2 311 9 982 3 937 1 126 5 063 2 368 709 3 077 Non-current lease liabilities (11 280) (4 707) (15 987) (11 604) (4 326) (15 930) (11 250) (4 633) (15 883) Current lease liabilities (2 076) (654) (2 730) (2 067) (620) (2 687) (2 014) (638) (2 652) Net debt (including lease liabilities) (5 685) (3 050) (8 735) (9 734) (3 820) (13 554) (10 896) (4 562) (15 458) 2 EBITDA and EBITDA (pre-IFRS 16 Leases) The following presents a reconciliation from profit for the period (computed in accordance with IFRS) to EBITDA and EBITDA (pre-IFRS 16 Leases) for the Group on a historical basis for each of the periods indicated. 26 weeks to 30 August 2026 26 weeks to 31 August 2025 52 weeks to 1 March 2026 Pick n Pay* Rm Boxer* Rm Group** Rm Pick n Pay* Rm Boxer* Rm Group** Rm Pick n Pay* Rm Boxer* Rm Group** Rm (Loss)/profit for the period (605) 567 (38) (825) 502 (323) (1 749) 1 556 (193) Tax (297) 210 (87) (256) 178 (78) (445) 556 111 Loss from impairment of assets 71 14 85 40 5 45 360 31 391 Net (profit)/loss on disposal of assets (82) (17) (99) 24 15 39 38 13 51 Finance costs 667 271 938 645 274 919 1 298 549 1 847 Finance income (270) (39) (309) (249) (43) (292) (455) (67) (522) Trading (loss)/profit (516) 1 006 490 (621) 931 310 (953) 2 638 1 685 Depreciation on property, plant and equipment 401 354 755 402 327 729 804 665 1 469 Amortisation on intangible assets 49 10 59 52 9 61 104 19 123 Depreciation on right-of-use assets 792 370 1 162 790 340 1 130 1 599 699 2 298 Finance income – trade and other receivables 28 9 37 30 6 36 55 10 65 EBITDA 754 1 749 2 503 653 1 613 2 266 1 609 4 031 5 640 Profit on termination of leases (99) (27) (126) (126) (13) (139) (260) (35) (295) Lease incentives received 43 17 60 51 17 68 79 76 155 Principal lease liability payments (1 029) (264) (1 293) (1 009) (254) (1 263) (2 064) (620) (2 684) Interest paid on lease liabilities (670) (311) (981) (681) (274) (955) (1 319) (472) (1 791) Principal net investment in lease receipts 171 – 171 184 – 184 360 – 360 Interest received on net investment in lease receivables 103 – 103 113 – 113 228 – 228 EBITDA (pre-IFRS 16 Leases) (727) 1 164 437 (815) 1 089 274 (1 367) 2 980 1 613 # These amounts represent operational cash flow balances between the entities and were repaid shortly after period end. Refer to Note 7. * Information has been extracted, without adjustment, from the Group’s accounting records. ** Information has been extracted, without adjustment, from the Group condensed interim financial statements of Pick n Pay Stores Limited for the 26 weeks ended 30 August 2026.
Page 21
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 19 3 Trading profit after lease interest (TPAL) The following presents a reconciliation from trading (loss)/profit (computed in accordance with section 2 above) to trading profit after lease interest for the Group on a historical basis for each of the periods indicated. 26 weeks to 30 August 2026 26 weeks to 31 August 2025 52 weeks to 1 March 2026 Pick n Pay* Rm Boxer* Rm Group** Rm Pick n Pay* Rm Boxer* Rm Group** Rm Pick n Pay* Rm Boxer* Rm Group** Rm Trading (loss)/profit (516) 1 006 490 (621) 931 310 (953) 2 638 1 685 Leases finance expense (662) (262) (924) (644) (229) (873) (1 295) (483) (1 778) Leases finance income 102 – 102 101 – 101 215 – 215 Trading profit after lease interest (1 076) 744 (332) (1 164) 702 (462) (2 033) 2 155 122 * Information has been extracted, without adjustment, from the Group’s accounting records. ** Information has been extracted, without adjustment, from the Group condensed interim financial statements of Pick n Pay Stores Limited for the 26 weeks ended 30 August 2026. Appendix 1 continued
Page 22
www.pnp.co.za 20 Appendix 2 Additional information Additional information may not represent a defined term under IFRS Accounting Standards and, as a result, it may not be comparable with similarly titled measures reported by other companies. Additional information is the responsibility of the Board of directors of the Group, is presented for illustrative purposes only and has not been reviewed nor reported on by the Group’s external auditors. 1. Like-for-like turnover and expense growth comparisons Like-for-like ( ‘ Lf L’ ) turnover growth comparisons relate to stores that have been open for at least 12 months, removing the impact of store openings, closures and conversions in the current and previous reporting periods, and in the prior period removes the impact of the amended franchise model. This franchise model offers a higher purchasing rebate to our franchisees (recorded against turnover) in exchange for a higher franchise royalty fee (recorded in other income). LfL turnover on new or closed adjacent liquor stores inherits the LfL indicator of the store that it is attached to, as this is the manner in which the Group manages its store base. This is not the case for new or closed stand-alone liquor and clothing stores. LfL expense growth comparisons remove the impact of store openings, closures and conversions, and the movement in the ECL allowance, in the current and previous reporting periods. 2. Forward looking information These Group interim condensed financial statements contain certain forward-looking statements related to the Group’s possible future actions, long-term strategy, performance, liquidity position and financial position which, although based on assumptions and/or estimates that the Group considers reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those expressed or implied by the forward-looking statements. All forward-looking statements are solely based on the views and considerations of the Board, and in particular, as at the date hereof. The Group does not undertake to update or revise any of these forward-looking statements publicly, whether to reflect new information, future events or otherwise. These forward-looking statements have not been reviewed or reported on by the Group’s external auditors.
Page 23
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 21 Zambia Eswatini Botswana Lesotho South Africa Zimbabwe Pick n Pay Boxer TM Owned Franchise Owned Associate Total Country: South Africa 962 565 587 – 2 114 Eswatini – 24 13 – 37 Zambia 24 – – – 24 Botswana 18 5 – – 23 Lesotho – 4 – – 4 Zimbabwe – – – 73 73 1 004 598 600 73 2 275 Formats: Hypermarkets 23 – – – 23 Supermarkets 290 397 347 59 1 093 Clothing 421 18 – – 439 Liquor 270 183 221 14 688 Build – – 32 – 32 1 004 598 600 73 2 275 Company-owned stores Franchise stores Business investment Geographic footprint South African store formats Supermarkets 998 Clothing 436 Liquor 648 Build 32 Total South African stores 2 114 Overview of store estate
Page 24
www.pnp.co.za 22 Number of stores 1 March 2026 Opened Closed Converted openings Converted closures 30 August 2026 Pick n Pay Company-owned Hypermarkets 23 – – – – 23 Supermarkets 285 2 (5) 10 (2) 290 Clothing 419 7 (5) – – 421 Liquor 265 1 (5) 10 (1) 270 Total company-owned 992 10 (15) 20 (3) 1 004 Franchise Supermarkets 218 1 (2) – (10) 207 Express 190 1 (1) – – 190 Clothing 18 – – – – 18 Liquor 194 1 (2) – (10) 183 Total franchise 620 3 (5) – (20) 598 Boxer Company-owned Supermarkets 338 7 – 2 – 347 Liquor 206 14 – 1 – 221 Build 32 – – – – 32 Total company-owned 576 21 – 3 – 600 TM Supermarkets Associate 73 – – – – 73 Total Group stores 2 261 34 (20) 23 (23) 2 275 AFRICAN FOOTPRINT – included in total stores above 159 2 – – – 161 Pick n Pay company-owned 42 – – – – 42 Boxer company-owned 12 1 – – – 13 Pick n Pay franchise 32 1 – – – 33 TM Supermarkets – associate 73 – – – – 73 AFRICAN FOOTPRINT – by country 159 2 – – – 161 Botswana 22 1 – – – 23 Lesotho 4 – – – – 4 Eswatini 36 1 – – – 37 Zambia 24 – – – – 24 Zimbabwe 73 – – – – 73
Page 25
Unaudited Group Condensed Interim Financial Statements for the 26 weeks ended 30 August 2026 23 Corporate information Pick n Pay Stores Limited Registration number: 1968/008034/06 JSE and A2X share code: PIK ISIN: ZAE000005443 Board of directors Executive Sean Summers (CEO) Tina Rookledge (CFO) 1 Independent non-executive2 James Formby (Chair) Haroon Bhorat Aboubakar Jakoet Thabo Leeuw Grant Pattison Annamarie van der Merwe Pooven Viranna Non-executive Gareth Ackerman Jonathan Ackerman Suzanne Ackerman Registered office Pick n Pay Office Park 101 Rosmead Avenue Kenilworth Cape Town 7708 Tel: +27 21 658 1000 Fax: +27 (0)86 675 1475 Postal address PO Box 23087 Claremont Cape Town 7735 Registrar Computershare Investor Services Proprietary Limited Rosebank Towers 15 Biermann Avenue Rosebank 2196 Tel: +27 11 370 5000 Postal address Private Bag X9000 Saxonwold 2132 JSE Limited sponsor Rand Merchant Bank (a division of FirstRand Bank Limited) 1 Merchant Place Cnr Fredman Drive and Rivonia Road Sandton 2196 Auditors Ernst & Young Inc. Principal bankers Absa Limited Rand Merchant Bank (a division of FirstRand Bank Limited) Corporate advisors Rand Merchant Bank (a division of FirstRand Bank Limited) Company Secretary Vaughan Pierce Email address: companysecretary@pnp.co.za Promotion of Access to Information Act informationofficer@pnp.co.za Investor relations Stephen Carrott Email address: stephencarrott@pnp.co.za Website Pick n Pay: www.pnp.co.za Pick n Pay Clothing: www.picknpayclothing.co.za Pick n Pay investor relations: www.picknpayinvestor.co.za Customer careline Pick n Pay Tel: +27 860 30 30 30 Email address: customercare@pnp.co.za Boxer Tel: +27 860 02 69 37 Email address: customercare@boxer.co.za www.pnp.co.za | www.pnphome.co.za | www.picknpayclothing.co.za | www.boxer.co.za Engage with us on 1 Tina Rookledge replaced Lerena Olivier, who resigned from the Board, as Chief Financial Officer (CFO) effective 6 August 2026. 2 Audrey Mothupi-Palmstierna retired as an independent non-executive director effective 6 August 2026.