Trading Update For The Nine Months Ended 30 June 2018
Pepkor Holdings Limited
(Previously Steinhoff Africa Retail Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: PPH
(“PEPKOR” or the “Company”)
TRADING UPDATE FOR THE NINE MONTHS ENDED 30 JUNE 2018
For the nine months ended 30 June 2018 PEPKOR achieved group revenue growth of 13.8% to
R48.9 billion on a statutory basis. On a Comparable Basis, as defined below, group revenue
growth of 9.2% was achieved.
The Pep and Ackermans brands in aggregate reported merchandise sales growth of 7.7% and
like-for-like growth of 2.7%. Retail space increased by 5.4% with the opening of 148 new stores
(91 Pep and 57 Ackermans) during the period. Deflation of approximately 5% in the clothing,
footwear and homeware (CFH) product categories within Pep and Ackermans continued to
weigh on sales growth. Volume growth of 9.6% (5.4% on a like-for-like basis) supported
performance. The impact of deflation on CFH sales growth is expected to reduce during the
fourth quarter of the 2018 financial year. In addition, the month of July showed particularly
strong like-for-like performance.
Pep Africa, comprising approximately 4% of group revenue, continues to experience
challenging operating conditions in addition to deflation. Positive merchandise sales growth
of 4.0% was reported. Like-for-like sales performance improved during the third quarter,
resulting in a decline of 14.7% compared to a decline of 16.2% reported for the six months
ended 31 March 2018.
Strong merchandise sales growth momentum, on a Comparable Basis, continued in the
speciality fashion and footwear brands, reporting growth of 14.0% and like-for-like growth of
7.4% in aggregate. The interim management team at Tekkie Town has successfully stabilised
the business and operations continue to operate in line with expectations.
The furniture, consumer electronics and appliances brands continued to perform well.
Notwithstanding difficult trading conditions in the durables market, merchandise sales growth
of 10.7% and like-for-like growth of 6.3% was reported for the nine-month period.
The building materials and DIY (Do-it-yourself) business continued to operate in a challenging
market. On a Comparable Basis, merchandise sales declined by 1.4% while like-for-like sales
declined by 2.2% for the period under review.
The overall retail environment remains very competitive with financially constrained
consumers. The group’s focus on providing value to customers at affordable prices is expected
to continue supporting group performance during the remainder of the financial year.
The information included above does not constitute an earnings forecast and has not been
reviewed and reported on by the Company’s external auditors.
Comparable Basis – determination
The Comparable Basis results for the nine months ended 30 June 2017, which includes the pre-
acquisition contribution from Tekkie Town and Building Supply Group (BSG), has been
calculated as follows:
R millions Statutory Tekkie Town BSG Comparable
9 months ended 4 months ended 9 months ended
9 months ended
30 June 2017 31 January 2017 30 June 2017
(1) (2) (3) 30 June 2017
PEPKOR group 43 001 732 1 069 44 802
The Comparable Basis results have been prepared for illustrative purposes only, in order to
provide shareholders with results which are comparable. Because of its nature, the
Comparable Basis results may not fairly present PEPKOR’s results of operations.
The Comparable Basis results are presented in accordance with the JSE Listings Requirements,
the Guide on Pro Forma Financial Information issued by SAICA. The Comparable Basis results
are the responsibility of the directors and were not reviewed or reported on by PEPKOR’s
(1) The column titled “Statutory 9 months ended 30 June 2017” has been extracted without
adjustments from the Pepkor audited financial statements for the year ended
30 September 2017.
(2) The column titled “Tekkie Town 4 months ended 31 January 2017” has been extracted
without adjustments from the Tekkie Town financial statements reviewed by Grant
Thornton (partner C Minnie) for the four months ended 31 January 2017. Tekkie Town
was acquired and consolidated as part of the PEPKOR results from 1 February 2017. The
management of PEPKOR is satisfied with the quality of the financial statements of Tekkie
Town applied. Tekkie Town forms part of the speciality fashion and footwear brands
(3) The column titled “BSG 9 months ended 30 June 2017” has been extracted without
adjustments from the BSG management accounts for the nine months ended
30 June 2017. BSG was acquired by PEPKOR and consolidated as part of the PEPKOR
results from 1 October 2017. The management of PEPKOR is satisfied with the quality of
the management accounts of BSG applied. BSG forms part of the building materials
and DIY division.
(4) All comparable adjustments will have a continuing effect on the financial results of
21 August 2018
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