JSE-listed Pepkor Holdings is reporting strong performance in its annual results, posting a 106.7% increase in earnings and market share gains that have propelled the company beyond its pre-Covid-19 performance levels. .
The owner of well-known brands such as Pep, Ackermans, Tekkie Town and Incredible Connection, managed to overcome the impact of the July riots in KwaZulu-Natal and parts of Gauteng, which saw 549 of its stores, representing 10% of its base of sales. the store – struck by looting.
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“Our business model and market positioning (the group owns more than 30 brands in the value retail landscape) allowed us to consolidate our position as the leading discount and value retailer in the South African retail market, providing unparalleled value to our clients, “Pepkor CEO Leon Lourens said in a statement.
The retail value chain company saw its earnings per share (Heps) increase by 106.7% to 135.4 cents in the current period from 65.5 cents in 2020, the current Heps is also higher than the 2019 figure of 96.8 cents. The company also saw operating profit grow for the period by 40% to R9.3 billion.
Pepkor experienced 9.2% revenue growth during the period to R77.3 billion, driven by exceptional performance in its apparel and general merchandise divisions which contributed 64% and 84% to overall revenue, respectively. The current 2021 revenue figure is also 11.1% higher than that recorded in the 2019 period.
The company is in a strong cash position, earning R11 billion from its operations. Further strengthening this position is its substantial reduction in net debt from R7.1 billion in the prior period to R5.0 billion.
“This is a substantial reduction and there are plans to further smooth and broaden our payment profile. Our debt strategy continues to be to diversify our sources of financing through our bond program and reduce the overall cost of financing, ”said Lourens.
Market share gains
The group reports market share gains in most of the categories in which it operates. In addition, since 2019 Pepkor has gained 201 basis points of market share in the clothing, footwear and home goods categories in which it operates.
“Our fundamentals are in place and our disciplined approach is paying off, and this is particularly evident in the last 18 months. Our teams have weathered the impact of the Covid pandemic, a slowdown in consumer spending and civil unrest in July this year, ”Lourens said.
Shareholders will receive a 44.2 cent dividend from the group after it chose not to pay dividends during the precarious times of 2020 to preserve cash.
Going forward, the retailer, which managed to open 247 new stores nationwide this year alone, says it seeks to continue offering its customers good value for money while retaining low prices.
“We hope that our clients are under [further] pressure and we will face challenges such as supply chain disruption, burden reduction and unprecedented levels of unemployment, ”said Lourens.
“However, Pepkor is the value retailer that offers our customers value for money products and services at the lowest prices and at their convenience. We have built the business to grow and we are determined to succeed, ”said Lourens.