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South Africa’s Pepkor flags 20% drop in annual earnings as pandemic weighs

(Adds debt repayment)

JOHANNESBURG, Oct 15 (Reuters) – South Africa’s Pepkor Holdings expects its annual earnings to fall by at least 20% due to the impact of COVID-19 on sales and provisioning, the clothing and furniture retailer said on Thursday.

Headline earnings per share (HEPS) for the year ending September 30 are expected to decrease by at least 20% compared to the 96.8 cents it reported a year ago. HEPS strip out one-off items and are the main profit measure in South Africa.

“The COVID-19 pandemic has impacted the performance in many areas of the Group, most notably through lost sales and increased provision levels on credit books. This has contributed to the likely impairment of carrying values of goodwill and intangible assets,” the company said.

Pepkor also blamed an IFRS 16 accounting measure.

By 0923 GMT, the shares were down 2.8%.

Pepkor, majority owned by Steinhoff also said it successfully concluded talks to refinance 5 billion rand ($300 million) of debt due for repayment in May 2021 and the debt is now repayable in September 2023.

In addition, a 1 billion rand bridge revolving credit facility originally due to expire in November 2021 has been extended to September 2023. ($1 = 16.6596 rand)

(Reporting by Tanisha Heiberg and Nqobile Dludla; editing by Jason Neely and Emelia Sithole-Matarise)

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