“This is purely the accounting consequence of IFRS 16, and it is important to note the group has no long-term debt, and its major short-term debt providers have confirmed that the standard will not have any impact on the group's risk profile, its liquidity and ability to raise funds,” chief executive Richard Brasher said.
He said in a presentation Pick n Pay was “one of the first out of the starting blocks” in the adoption of the new accounting standard.
By adopting a much more onerous fully retrospective approach to the standard, investors and shareholders would, when Pick n Pay interim results were released in October, be able to recalibrate their understanding of the changes, through transparent comparisons with the previous two year results, he said.
Pick n Pay’s share price fell 1.37 percent on Wednesday to R60.36, but the decline was less than the average retail sector index, which was down by 2.07 percent at the same time. The share later closed at R59.26.