Pepkor Holdings Limited (PPH) H2 2024 earnings summary

Executive summary

• Revenue increased 9.2% year-over-year to ZAR 85.1 billion, with operating profit up 17.4% to ZAR 9.8 billion and HEPS up 10.3% to 140.2c; dividend declared at 48.5c per share, maintaining a three-times cover.

• Market share gains achieved across key retail categories, with improved margins and consistent performance despite a constrained environment.

• Tangible results in fintech, with significant growth in device rentals and insurance policies, including 1 million Foneyam phone rental customers.

• Strategic acquisitions and new store openings supported growth, including the disposal of The Building Company, acquisition of Choice Clothing, and expansion in Avenida.

• Inclusion in the JSE Top 40 Index and FTSE/JSE Responsible Investment Index.

Financial highlights

• Statutory revenue grew 7.8% to ZAR 85.1 billion; comparable revenue growth was 9.2%.

• Gross profit increased 8.4% to ZAR 32.6 billion, with gross margin up 190bps to 38.3%.

• Cash generated from operations reached nearly ZAR 12 billion, with a cash conversion rate of 79%.

• Net debt to EBITDA at 0.7x, with net debt at ZAR 7.1 billion and EBITDA-interest cover at 6.2x.

• Operating profit margin improved by 80bps to 11.5%.

Outlook and guidance

• Management is optimistic for the next financial year, citing improved consumer environment, lower food inflation, and the impact of the two-pot retirement system.

• Store openings are expected to return to normal levels, with 250–300 new stores planned.

• Continued focus on fintech and informal market growth, with further M&A opportunities under evaluation.