PEPKOR HOLDINGS LIMITED - Trading Update For The Three Months Ended 31 December 2018

Release Date: 28/01/2019 15:30
Code(s): PPH
 
Wrap Text
Trading Update For The Three Months Ended 31 December 2018

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”)

TRADING UPDATE FOR THE THREE MONTHS ENDED 31 DECEMBER 2018

In a challenging trading environment the Pepkor group increased revenue by 6.1% to
R19.5 billion for the three months ended 31 December 2018.

Clothing & general merchandise

The clothing and general merchandise segment reported sales growth of 6.1% and like-for-like
growth of 3.4%. Retail space increased by 4.0% compared to the comparative quarter.

The Pep and Ackermans brands in aggregate reported sales growth of 6.8% and like-for-like
sales growth of 2.7%. Core clothing, footwear and homeware (CFH) product categories
achieved 8.6% sales growth and 4.6% like-for-like growth which is very encouraging in the
current operating environment. Pep and Ackermans in aggregate reported inflation of 1.6% in
CFH retail selling prices.

Notwithstanding a decline in sales of 4.8% in rand terms as a result of currency devaluation
and poor performance in Zimbabwe, Pep Africa reported a markedly improved performance
in constant currency with sales growth of 18.7% and like-for-like growth of 13.3%. This was
supported by improved performance in Angola, Zambia and Nigeria.

The Speciality division reported sales growth of 7.3% with like-for-like growth of 3.0% in
aggregate. Satisfactory performance was achieved in the clothing product categories with
continued softer performance in footwear.

Furniture, appliances & electronics

The furniture, appliances and electronics brands reported sales growth of 0.6% and a decline
in like-for-like sales of 2.7% as the spending patterns of financially constrained consumers favour
essentials as opposed to durable product categories.

Building materials

Sales growth of 2.3% was achieved in the building materials segment with like-for-like growth
of 3.5% while retail space reduced by 1.3%. Performance was supported from a wholesale
perspective however, discounting in this highly competitive and contracting market continues
to put margins under pressure.

Fintech

The FLASH business continues to achieve significant growth, while a satisfactory performance
was reported by the Capfin call centre and debt collection operations. The segment reported
31.3% revenue growth for the quarter.
Outlook

Overall, Pepkor’s defensive market position and strategy of providing customers with value at
affordable prices, continue to resonate with a financially constrained consumer. It is expected
that these Pepkor fundamentals will continue to support future performance in a very
challenging retail environment.

Impact of Pepkor group’s pro forma constant currency disclosure

The Pepkor 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 prior year'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 on prior period                                    Reported       Constant
                                                                      currency       currency

 Pep Africa                                                               (4.8%)         18.7%

The information included above is the responsibility of the directors and does not constitute an
earnings forecast and has not been reviewed and reported on by the Company’s external
auditors. The constant currency information has been prepared for illustrative purposes only.

Parow

28 January 2019

Sponsor

PSG Capital

Date: 28/01/2019 03:30:00 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.

Email this JSE Sens Item to a Friend.

Share This Story