One of South Africa’s largest employers says its FinTech is making a killing

Pepkor on Monday (25 November), reported a 9% rise in revenue for the year ended September 2019, to R69.6 billion, “despite a very difficult retail environment where consumer spending remained constrained, fuelled by high levels of unemployment and low economic growth”.

Operating profit declined 5.5% to R5.5 billion, while operating profit from continuing operations and before capital items increased by 15.6% to R6.8 billion.

Diluted headline earnings per share was up 14% to 96.2 cents per share, however, basic earnings per share declined by 22.5% to 64.6 cents – due mainly to an impairment charge related to The Building Company.

A scrip dividend was declared, with a cash alternative of 20.9 cents per share – down from 27.8 cents in the prior year.

Pepkor – one of the largest employers in the South African retail sector with 56,100 employees – continued its expansion and opened 338 new stores, expanding the group’s footprint to 5,415 stores.The retailer operates in 12 African countries

Pepkor said that its FinTech segment increased revenue by 43.9% to R7.2 billion, with operating profit increasing to R483 million.

It said that the FLASH business continues to report strong growth, completing on average 3.2 million daily transactions with virtual turnover growth exceeding 20%.

FLASH is a technology-driven company committed to making people’s lives easier. Its hardware and applications offer informal traders an affordable and safe payment system through which to do business in their communities.

The number of FLASH traders increased to 169,000 from 145,000 last year and the business continues to invest in future growth, Pepkor said.

Capfin, the group’s loan business, “performed well, appealing to a broader range of customers through its digital channels”.

“It further successfully established its own internally funded credit book, which remains healthy with credit performance meeting expectations,” Pepkor said.

Looking ahead, Pekor said that the current environment provides opportunities for market share expansion.

It said it will target new geographies for FLASH – particularly in the informal market.

“Organic expansion opportunities remain top of mind, including store footprint expansion, the development of new retail formats and the creation of new channels through which to serve our customers.

“The group will continue to focus on market share expansion and improving operating cost efficiencies.”

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One of South Africa’s largest employers says its FinTech is making a killing