JSE-listed Pepkor Holdings has announced a 17% increase in group operating profit, to R9.8 billion, with revenue growing to R85.1 billion, driven by resilient performance across its retail and fintech operations.
The group, which has released its reviewed annual results for the year ended 30 September, declared a 48.5c per share dividend.
Pepkor is a South African-based investment and holding company focused on the discount and value consumer retail and fintech markets. The majority of operations are in SA, extending to other African countries and Brazil.
Its subsidiaries include PEP, Ackermans, Dunns, Shoe City and Tekkie Town.
Pieter Erasmus, CEO of Pepkor, says the group’s strategy of offering value-driven, accessible products, while broadening its reach into key growth areas, has produced tangible results, supported by strategic decisions and disciplined execution.
“Our business model’s resilience is evident in these results. We continue to gain market share at improved margins in a challenging trading environment. Furthermore, our strategic focus on digital inclusion and fintech has added another powerful dimension to our traditional retail strengths, positioning us to serve our customers better, while building sustainable long-term value.”
Operating profit before capital items increased 8.4% to R9.8 billion, and gross profit increased 13.5% to R32.6 billion.
The results show Pepkor also reported progress in driving digital inclusion across SA, providing affordable mobile technology.
According to Pepkor, the group increased its market share in prepaid handsets, now selling seven-and-a-half out of every 10 prepaid smartphones in SA, up from seven in the previous year.
The group says it sold 11.5 million cellular handsets during the year and maintains an active base of 29 million SIM cards.
It explains that FoneYam, which provides smartphones on a rental basis, reached one million customers and now exceeds 120 000 monthly activations, bolstering Pepkor's aim to bring connectivity to underserved markets.
Erasmus comments: “This effort underscores our commitment to making mobile connectivity accessible to all – supporting economic activity, education and health services in rural and underserved communities.”
Pepkor’s traditional retail businesses delivered consistent performance and expanded market share, says the firm.
It reported a gross profit margin improvement of 190 basis points, rising to 38.3%, underscoring Pepkor's capability to grow profitably without relying on additional discounting.
PEP, the group’s largest brand, continued its strong performance, expanding its footprint and market share with an ongoing focus on affordability and quality. The brand reported a positive trajectory in like-for-like sales growth throughout the year, while higher full-price sales improved gross profit margin.
Ackermans showed good progress in recovering sales levels, with a positive trajectory in like-for-like sales growth and full-price sales.
Pepkor added 1.2 million new credit accounts in the year under review. The group maintained its conservative approach to credit granting and saw lower approval rates during the year. The number of customers able to make purchases remains at a healthy 74% level and non-performing loans remain at acceptable levels, it says.
“We executed this strategic expansion with careful consideration of the economic environment, maintaining conservative credit granting criteria and, most importantly, ensuring we do not put our customers under undue financial pressure.
“The benefit is that customers are able to shop across Pepkor brands with one account and we have a better understanding of their behaviour – allowing us to develop ways to serve them better,” adds Erasmus.
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