Source: TM Pick n Pay returns to operating profit – herald
Business Writer
SUPERMARKET chain TM Pick n Pay returned to operating profitability during the year to February 2026, after increasing sales volumes, improving margins and maintaining tight cost control, despite subdued consumer spending and a difficult trading environment.
In its annual results, the retailer said disciplined execution of its business strategy, coupled with improved procurement efficiencies and prudent cost management, enabled it to post stronger financial and operational performance, while funding expansion entirely from internally generated resources.
Although revenue declined by 5 percent to ZiG12,3 billion, from ZiG12,9 billion in the previous year, the company recorded a 6 percent increase in units sold, reflecting resilient consumer demand and market share gains achieved during the second half of the year.
The retailer said increased customer traffic into its stores was offset by lower average spending per shopper.
The business also strengthened its footprint during the year with the opening of a new supermarket in Shurugwi, while capital expenditure was financed without recourse to external borrowing, demonstrating strong cash generation.
TM Pick n Pay said the proportion of United States dollar-denominated sales almost doubled during the year, averaging 45 percent, compared with 23 percent in the previous financial year.
According to TM Pick n Pay, the higher foreign currency contribution improved procurement efficiency, enhanced stock availability and eased pressure on working capital requirements.
“In US dollar terms, operating profit reached US$2,0 million, reversing a loss of US$15,9 million recorded in 2025.
“Improved pricing discipline and a more stable operating environment lifted the gross profit margin from the previous year, while operating expenses rose as management maintained a strong focus on cost containment and operational efficiencies,” said TM Pick n Pay chairman Mr Fayaz King in the group’s full-year results to February 2026.
The retailer noted that several operating costs remain significantly higher than regional benchmarks, although the Government’s review of selected statutory and municipal charges could provide some relief in future.
The stronger trading performance enabled the supermarket division to post an operating profit of ZiG63,7 million, a significant turnaround from an operating loss of ZiG516,3 million recorded in the previous year.
In United States dollar terms, the segment generated an operating profit of US$2,0 million, compared with a loss of US$15,9 million in 2025.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 49 percent to ZiG320,4 million, from ZiG215,1 million, with the EBITDA margin improving to 2,62 percent from 1,78 percent.
In US dollar terms, EBITDA rose to US$10,1 million from US$7,2 million.
Loss after tax narrowed by 49 percent to ZiG117,2 million, from ZiG228,5 million recorded in the previous year.
In US dollar terms, the after-tax loss declined to US$3,5 million from US$6,7 million, reflecting stronger underlying trading performance, after the prior year’s results were affected by significant non-cash charges.
The company said its balance sheet remained robust throughout the year, with no utilisation of overdraft facilities or bank borrowings. Capital expenditure of US$3,2 million was fully financed from internally generated cash flows.
Meanwhile, the group’s hospitality business delivered stable operational performance during the period, with room occupancy remaining unchanged at 39 percent.
A 9 percent increase in the average daily room rate helped lift revenue per available room (RevPAR) by 8 percent.
The hospitality division reported profit after tax of ZiG7,9 million, up from ZiG1,5 million in the previous year.
However, in United States dollar terms, profit declined by 29 percent, as higher operating costs weighed on earnings.
Following the financial year-end, the group accepted an offer from its joint venture partner to acquire its interest in the hospitality partnership, subject to shareholder approval and the fulfilment of customary conditions.
The company said shareholders would receive further details through a circular to be issued in due course.
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