Pepkor Unveils Resilient Annual Performance with Market Gains and Dividend Declaration for FY23

In a recent media statement, Pepkor, a leading retail conglomerate, has reported solid financial results for the year ended 30 September 2023, demonstrating robust cash generation and market share gains. The company’s performance was particularly impressive in the second half of the fiscal year, driven by stronger sales and operational efficiency.

Financial Highlights:

• Revenue Growth: Pepkor achieved a commendable 7.7% growth in revenue, reaching R87.4 billion.
• Profit Margin: The gross profit margin increased by 20 basis points, showcasing the company’s commitment to operational efficiency.
• Cash Generation: The group generated R13.0 billion in cash, reflecting a substantial 15.9% increase from the previous year, attributed to impeccable working capital management.
• Dividend Declaration: The board declared a dividend of 48.1 cents per ordinary share, highlighting the company’s commitment to delivering value to its shareholders.
• Social Impact: Pepkor provided 4,100 learnerships and installed 6 MWp of solar capacity, showcasing its dedication to sustainable business practices.

Operational Highlights:

Pepkor’s second-half performance was pivotal in driving market share gains, with a notable 53rd trading week in South Africa-based clothing and general merchandise retail brands.

Retail Segments:

• Clothing and General Merchandise: PEP achieved strong results with significant market share gains in various product categories. The PAXI parcel distribution service expanded, and a new teenage range, CUBE, was successfully launched.
• Furniture, Appliances, and Electronics: Despite weakened consumer demand, market share was expanded in specific product categories. New store formats were introduced to supplement the existing offerings.
• Building Materials: The Building Company (TBCo) maintained sales performance in a challenging market, with enhancements to the customer value proposition and the successful launch of new store formats.

Fintech Segment:

Pepkor’s financial services businesses benefited from the group’s credit interoperability strategy and a high-interest rate environment. Tenacity opened a record number of new A+ accounts, and the group leveraged its insurance capability in the Abacus business.

Informal Market:

Flash, operating in the informal market, demonstrated impressive profitability growth, with increased throughput and enhanced services for traders.

Outlook:

The consumer and operating environment in South Africa present ongoing challenges, with disruptions in port operations affecting stock inflows. While sales performance exhibited fluctuations, Pepkor remains resilient, and the success of the first quarter of FY24 will depend on festive and back-to-school trade.

Pepkor emphasizes its dedication to fulfilling customer needs and making a positive difference in their lives.

Dividend Declaration:

The board declared a cash dividend of 48.07572 cents per ordinary share payable to shareholders on Monday, 22 January 2024. The dividend, declared out of income reserves, underscores Pepkor’s commitment to rewarding its shareholders.

In conclusion, Pepkor’s annual results reflect a resilient and adaptive business, navigating challenges and capitalizing on opportunities for growth and expansion.

To view full PDF article of Reviewed Annual Results, click link below: https://senspdf.jse.co.za/documents/2023/jse/isse/pphe/FY23.pdf