PICK N PAY HOLDINGS LIMITED - Trading statement

Trading statement

Pick n Pay Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1981/009610/06)
Share code: PWK ISIN code: ZAE000005724

Pick n Pay Stores Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1968/008034/06)
Share Code: PIK ISIN code: ZAE000005443

Trading statement

Shareholders are advised that Pick n Pay Holdings Limited and Pick n Pay Stores Limited (“the
Group”) are in the process of finalising their financial results for the 6 months ended 31
August 2012, which are expected to be published on 24 October 2012.

Turnover growth for the period was 5.9% with like-for-like growth at 3.2%. Although new
store growth is still behind the market, store openings are weighted to the second half of this
financial year and significant work is underway to strengthen the medium to longer term
pipeline. Lower than expected turnover growth is the result of increased market
competiveness, poor availability of merchandise from suppliers and continued economic
pressure on our heartland customer. The Smartshopper programme with over 5.7 million
active customers will be critical in helping the Group reinvigorate turnover growth across the
business.

The Group has made pleasing progress with its strategy implementation. Our second
distribution centre - in Philippi in the Western Cape- became operational during the period
and is performing well ahead of expectations.

Initial operating difficulties were encountered at Longmeadow when taking over day to day
management of the distribution centre. Operational and cost improvements have been
achieved since then. The financial implications of these difficulties plus contract termination
costs have had a negative impact on the results.

Pleasing progress has been made in improving labour productivity. Initial results to redesign
the merchandise replenishment process are encouraging. A decision was therefore taken to
accelerate expenditure on these activities, despite a further negative effect on short term
results. An investment has been made in developing internal skills and costs have been
incurred. The Group is however confident that while the short term impact is negative,
investing in internal skills and accelerating these programmes will bear significant future
benefits.

The category buying function was centralised during the current period. Some operational
difficulties were encountered which have negatively affected margins and stock availability in
the short term. The Group is working with its suppliers to resolve these issues.

In the prior period the operational results of Franklins are accounted for as a discontinued
operation.

We expect the results for the 6 months ended 31 August 2012 to fall into the following ranges
compared to the previous period:

-   EBITDA from continuing operations will decrease by between 10% and 20%;
-   EPS and diluted EPS from total operations will decrease by up to 10%;
-  HEPS and diluted HEPS from total operations will decrease by between 10% and 20%;
-  EPS and diluted EPS from continuing operations will decrease by between 25% and 35%;
-   HEPS and diluted HEPS from continuing operations will decrease by between 30% and
    40%;

The Group is excited by the appointment of Richard Brasher as the new Chief Executive
Officer and believe he will bring focus, energy and directly relevant expertise to the Group at
a very important time in its development.

This trading statement has not been reviewed or reported on by the Group’s auditors.

By order of the board
Cape Town
5 October 2012                                             Sponsor: Investec Bank Limited

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