PEPKOR HOLDINGS LIMITED - Trading Statement And Other Matters

Release Date: 20/11/2018 15:24
Code(s): PPH
 
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Trading Statement And Other Matters

Pepkor Holdings Limited
(Previously Steinhoff Africa Retail Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: PPH
ISIN: ZAE000247995
(“PEPKOR” or the “Company” or the “Group”)

TRADING STATEMENT AND OTHER MATTERS

1. TRADING STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2018

In terms of the Listings Requirements of the JSE Limited (“JSE”), 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, being
the year ended 30 September 2018 (“FY18”), will differ by at least 20% from the most recent
financial   results   for   the   previous   corresponding   period,   being   the   year   ended
30 September 2017 (“FY17”).

As reported at PEPKOR’s interim results during May 2018, the comparability of PEPKOR’s
statutory results is impacted by the following two factors (“Comparability Factors”):

   1.  During FY17 PEPKOR issued 882 million shares. This included 132 million shares for the
       acquisition of Tekkie Town on 1 February 2017 and 750 million shares issued on
       20 September 2017, shortly before the FY17 year end on 30 September 2017, upon
       PEPKOR’s listing on the JSE. This resulted in 3 450 million PEPKOR shares in issue compared
       to a weighted average number of shares of 2 678 million applied in the FY17 statutory
       earnings per share metrics.

       Should a weighted average number of shares of 3 450 million be applied to the FY17
       reported earnings of R3 550 million and reported headline earnings of R3 576 million,
       FY17 statutory earnings per share is reduced by approximately 30 cents. Refer to table
       below.

   2.  As reported in PEPKOR’s interim results on 29 May 2018, FY18 results will be impacted by
       one-off costs pertaining to a provision for exposure on a corporate guarantee and
       associated loans. The total exposure was provided for during the time of the interim
       results and amounted to R500 million.

       These one-off costs of will negatively impact FY18 basic and headline earnings per
       share metrics by approximately 14 cents and is calculated by applying the total impact
       net of tax of R500 million to a weighted average number of shares of 3 450 million.

Taking these factors into account, PEPKOR hereby advises that a reasonable degree of
certainty exist that the Statutory Results will reflect the following:

Statutory Results                                           FY17                           FY18
                                                      Statutory Results              Statutory Results
                                                          Reported                    Expected range
                                                            cents                   cents         % decrease
Basic earnings per share (cents)                            132.6                 77.0 – 90.2      32 – 42
Headline earnings per share (cents)                         133.6                 77.8 – 91.2      32 – 42


For purposes of clarity FY17 Comparable Results are provided as follows:

FY17 Comparable Results                                                                         
                                              FY17                Impact of issuing                 FY17
R million                                Statutory Results        882 million Pepkor         Comparable Results
                                             Reported                   shares                                                                 
                                                               
Earnings                                      3 550                          -                      3 550
Headline Earnings                             3 576                          -                      3 576

Weighted number of
ordinary shares in issue                      2 678                        772                      3 450
(millions)

Basic earnings per share
(cents)                                       132.6                     (29.7)                      102.9

Headline earnings per
share (cents)                                 133.6                     (29.9)                      103.7


Any pro forma information included as part of the trading statement have been provided for
illustrative purposes only, in order to provide shareholders with a better understanding of the
impact of the Comparability Factors on Pepkor’s Statutory results. Because of its nature, the
historic financial information may not fairly present PEPKOR’s financial position, changes in
equity, results of operations or cash flows. This information is presented in accordance with the
JSE Listings Requirements, the Guide on Pro Forma Financial Information issued by SAICA and
the accounting policies applied in quantifying the information are consistent with PEPKOR’s
accounting policies. This information is the responsibility of the board and were not reviewed
or reported on by PEPKOR’s auditors.

2. SHOPRITE CALL OPTIONS

Shareholders are referred to the Company’s previous announcement dated 15 December
2017 pertaining to the exercise of call option agreements with PIC, Lancaster, Titan and
Lavender Sky (“call options”) to acquire approximately 23.1% economic interest in, and
approximately 50.6% voting control of Shoprite, which call option agreements were subject to
certain conditions precedent.
It was confirmed then that the call options with Titan and Lavender Sky terminated and that
the board would enter into discussions with the remaining parties, being the PIC and Lancaster,
to assess the way forward.

Following various discussions and based on senior counsel advice, the board confirms the
termination of the call option agreements with the PIC and Lancaster. PEPKOR will therefore
not acquire any economic nor voting interest in Shoprite as described in the Pre-Listing
Statement.


Parow
20 November 2018

Sponsor:
PSG Capital

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