Pepkor Holdings is the latest credit provider to act with caution when it comes to extending credit to customers. <\/p>\n\n\n\n
Pepkor said that its operating profit climbed to R9.8 billion in the financial year ended 30 September 2024. <\/p>\n\n\n\n
The group said that its revenue grew to R85.1 billion, driven by strong performance across its retail and fintech operations. <\/p>\n\n\n\n
CEO Pieter Erasmus said that the group’s strategy of offering value-driven, accessible products while broadening its reach into key growth areas has produced tangible results. This has been supported by strategic decisions and disciplined execution. <\/p>\n\n\n\n
\u201cOur business model\u2019s resilience is evident in these results. We continue to gain market share at improved margins in a challenging trading environment,” said Erasmus.<\/p>\n\n\n\n
“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.”<\/p>\n\n\n\n
Despite headline earnings per share dropping slightly, the group increased its dividend by 0.8% to 48.5 cents per share. <\/p>\n\n\n\n
The group’s traditional retail business saw gross profit margin improving to 190 basis points, rising to 38.3%. <\/p>\n\n\n\n
PEP, the group’s largest band, continued its strong performance, expanding its footprint and market share with a focus on affordability and quality. <\/p>\n\n\n\n
Ackermans also saw good progress in recovering sales levels, with a positive trajectory in like-for-like sales growth and full-price sales.<\/p>\n\n\n\n
When it comes to FinTech, the group increased its market share in prepaid handsets, now selling seven and a half out of every 10 prepaid smartphones in South Africa – up from the previous year’s seven. <\/p>\n\n\n\n
The group sold 11.5 million cellular handsets during the year and has an active base of 29 million sim cards. <\/p>\n\n\n\n Closing the taps<\/strong><\/p>\n\n\n\n However, Pepkor, like other retailers and credit providers, has been cautious in extending credit to consumers. <\/p>\n\n\n\n Pepkor added 1.2 million new credit accounts in the year.<\/p>\n\n\n\n However, the group maintained its conservative approach to credit granting and saw lower approval rates during the year. <\/strong><\/p>\n\n\n\n The group said that the number of customers able to make purchases remained at a healthy level of 74% and non-performing loans remained at acceptable levels.<\/p>\n\n\n\n \u201cWe executed this strategic expansion with careful consideration of the economic environment, maintaining conservative credit granting criteria and, most importantly, ensuring that we do not put our customers under undue financial pressure,” said Erasmus. <\/p>\n\n\n\n “The benefit is that customers can shop across Pepkor brands with one account and we have a better understanding of their behaviour \u2013 allowing us to develop ways to serve them better,\u201d adds Erasmus. <\/p>\n\n\n\n Pepkor’s competitor Mr Price also recently announced that it made <\/p>\n\n\n\nFinancials<\/strong><\/td> FY2023<\/strong><\/td> FY2024<\/strong><\/td> % Change<\/strong><\/td><\/tr> Revenue (Rm)<\/td> 78 960<\/td> 85 136<\/td> +7.8%<\/td><\/tr> Operating profit before capital items (Rm)<\/td> 9 044<\/td> 9 802<\/td> +8.4%<\/td><\/tr> Earnings per share (cents)<\/td> (43.4)<\/td> 63.4<\/td> +>100%<\/td><\/tr> Headline earnings per share (cents)<\/td> 140.8<\/td> 140.2<\/td> -0.4%<\/td><\/tr> Dividend per share (cents)<\/td> 48.1<\/td> 48.5<\/td> +0.8%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n