Sharenet Sites 
Sharenet Sites
Pepkor Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: PPH
Debt Code: PPHI
ISIN: ZAE000259479
('Pepkor' or the 'group')
TRADING STATEMENT AND VOLUNTARY TRADING UPDATE FOR THE SIX MONTHS
ENDED 31 MARCH 2021
VOLUNTARY TRADING UPDATE
Continuing operations
Pepkor increased revenue from continuing operations by 8.1% to R36.5 billion for the six months
ended 31 March 2021 (the 'period'). This is in context of the comparable six months period ended
31 March 2020 (the 'comparable period') which was largely unaffected by the Coronavirus
pandemic ('COVID-19').
Conservative credit granting across all credit books in addition to lower interest rates, negatively
impacted growth in revenue earned from the Tenacity, Connect and Capfin credit books. When
revenue from these credit books is excluded, revenue growth of 9.9% was achieved.
Strong trading and continued market share gains in nearly all retail brands (according to Retailers'
Liaison Committee data) supported performance despite volatile operating conditions. The period
under review included restrictions imposed to deal with the second wave of COVID-19 and the
delayed start to the academic school year. From a group perspective, cash sales increased by
10.7% while credit sales decreased by 3.8%. The credit contribution to total group sales reduced
to 7% for the period from 8% in the comparable period. Credit book collections during the period
were at similar levels to those achieved in the comparable pre-COVID-19 period.
Group retail space declined by 1.8% year-on-year. During the period 108 new stores were opened
and 180 stores closed, including 111 John Craig stores which were disposed of. Store openings
were focused in the most robust and proven retail brands in the group.
Clothing and general merchandise
The clothing and general merchandise segment increased revenue by 8.1% to R26.3 billion for
the period.
Performance in Pep and Ackermans was underpinned by the leadership of these two retail brands
in the discount and value segments of the market. Pep and Ackermans in aggregate increased
sales by 8.8% and like-for-like sales increased by 6.9%. Both Pep and Ackermans continued to
grow market share in a declining apparel retail market.
Retail space expansion in Pep and Ackermans amounted to 2.6% year-on-year. This included
the opening of 65 new stores during the period.
Pep Africa increased constant currency sales by 7.1% while like-for-like sales increased by
13.1%. In South African Rand terms, sales declined by 12.1% due to the weakening of local
currencies and strengthening of the Rand.
The Speciality business benefited from consumer demand for casual wear and branded footwear
in the value segment. Sales increased by 11.3% including John Craig which was disposed of in
February 2021. Excluding John Craig, sales increased by 16.6% and like-for-like sales increased
by 13.5%.
The Tenacity gross credit book, which facilitates sales in Ackermans and Speciality, increased to
R3.2 billion at 31 March 2021 from R3.1 billion at 31 March 2020. Similar collection levels were
achieved to those in the comparable period. In Ackermans, strong growth in cash sales resulted
in the credit sales mix reducing to 17% from 18% in the comparable period.
Furniture, appliances and electronics
The furniture, appliances and electronics segment increased revenue by 12.8% to R5.7 billion for
the period. Sales of merchandise increased by 16.4% and like-for-like sales increased by 18.1%
as consumers continue to upgrade technology to support working or studying remotely and
investing in their homes in terms of furniture and appliances.
Performance was underpinned by strong growth in cash sales during the period and this, in
addition to prudent credit granting, resulted in the total credit sales mix reducing to 9% from 17%
in the comparable period.
The Connect gross credit book, which facilitates credit sales in JD Group, reduced to R1.5 billion
from R1.8 billion at 31 March 2020. Collections were at similar levels to that achieved in the
comparable period.
Fintech
The Fintech segment increased revenue by 3.1% to R4.5 billion for the period.
Revenue growth momentum in the FLASH business continued at double-digits as it invests in
new products, channels and geographies. Reduced credit granting and lower interest rates
impacted revenue growth in the Capfin unsecured lending business. The gross Capfin credit book
reduced to R1.9 billion from R2.6 billion at 31 March 2020 with collections improving marginally
on the comparable period.
Discontinued operations - The Building Company
The Building Company increased sales by 9.6% with like-for-like sales growth of 11.7%. The
disposal of The Building Company, as previously announced, remains in process as South African
Competition authorities consider the transaction.
Balance sheet and liquidity
Strong cash generation during the period facilitated reduction in net debt to R6.1 billion at
31 March 2021 compared to R14.1 billion at 31 March 2020 (including discontinued operations).
This included settlement of the last remaining preference share funding of R2.0 billion during the
period.
TRADING STATEMENT
In terms of the JSE Limited ('JSE') Listings Requirements (the 'Requirements'), a listed
company is required to publish a trading statement as soon as it becomes aware that a reasonable
degree of certainty exists that the financial results for the financial period to be reported on next
will differ by at least 20% from the financial results for the previous corresponding period.
Pepkor hereby advises shareholders and noteholders that a reasonable degree of certainty exists
that its earnings per share ('EPS') and headline earnings per share ('HEPS') for the six months
ended 31 March 2021 will increase by at least 20% as set out below. Both EPS and HEPS in the
comparable period have been adjusted to reflect The Building Company as a discontinued
operation.
EPS and HEPS - continuing operations:
' EPS is expected to increase by at least 8.8 cents (20%) when compared to the EPS of
43.8 cents reported for the comparable period; and
' HEPS is expected to increase by at least 9.1 cents (20%) when compared to the HEPS of
45.6 cents reported for the comparable period.
EPS and HEPS - including discontinued operations:
' EPS is expected to increase by at least 8.5 cents (20%) when compared to the EPS of
42.6 cents reported for the comparable period; and
' HEPS is expected to increase by at least 8.9 cents (20%) when compared to the HEPS of
44.5 cents reported for the comparable period.
The increase in EPS and HEPS is attributed to strong trading performance in addition to the
marked reduction in net debt and related finance costs during the period.
Further guidance of the likely increase in EPS and HEPS will be provided once the required
degree of certainty in terms of the Requirements has been established.
The financial information on which this trading statement is based, has not been reviewed or
reported on by the Company's external auditors.
Publication of results
Pepkor's results for the six months ending 31 March 2021 will be published on SENS on Thursday,
27 May 2021. A live webcast of the results presentation will be broadcast at 12:00pm (SAST).
The webcast registration link will be made available closer to the time on the Pepkor website:
www.pepkor.co.za
Pro forma constant currency disclosure
The group discloses unaudited constant currency information to indicate Pep Africa's
performance in terms of sales growth, excluding the effect of foreign currency fluctuations. To
present this information, current period turnover for Pep Africa reported in currencies other than
ZAR are converted from local currency actuals into ZAR at the comparable period's actual
average exchange rates. The table below sets out the percentage change in sales, based on the
actual results for the period, in reported currency and constant currency for the basket of
currencies in which Pep Africa operates.
% change in sales compared to the comparable period Reported Constant
currency currency
Pep Africa (12.1%) 7.1%
The constant currency information has been prepared for illustrative purposes only. The
information included in this announcement is the responsibility of the directors and does not
constitute an earnings forecast and has not been reviewed and reported on by the group's
external auditors.
Parow
28 April 2021
Equity Sponsor
PSG Capital
Debt Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 28-04-2021 07:30:00
Supplied by www.sharenet.co.za
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
