Debt reduction gives Pick n Pay more options
The company will fully settle its long-term debts at the end of October and CEO Richard Brasher has no immediate plans to take on more
Free from its long-term debts, cash-flush Pick n Pay now has the option to put more money behind attractive investment opportunities, CEO Richard Brasher said on Tuesday. The company had increased short-term borrowings to take advantage of better rates, but would fully repay its long-term debts in October, said Brasher, the former boss of Tesco’s UK business who took over as Pick n Pay CEO in early 2013. Seven years ago, Pick n Pay had long-term debts worth more than R1bn. Brasher said he had no immediate plans to use long-term debt “because I just spent the last five years getting rid of it”. “We’re in a good place — we’re a cash-generative business and therefore our choices are probably better now than before.” Thanks to stronger cash generation, the group had cash and cash equivalents of R709m on its books as at August 26, from a deficit of R834m a year before.
It could lift its capital investment spending, at R1.6bn in 2018, “if we feel that we could get a return for it”, ...