Pepkor Holdings Limited (PPH) H2 2025 earnings summary

Executive summary

• Achieved 12% revenue growth to ZAR 95.3 billion from continuing operations, with normalized HEPS up 23.4% year-over-year, driven by strong market share gains, disciplined cost management, and FinTech performance.

• Opened over 6,000 stores, including 269 new stores, and expanded digital and fintech capabilities, with strategic acquisitions such as Choice Clothing and Retailability brands.

• Maintained strong cash generation (ZAR 10.9 billion), with cash conversion at 82% excluding FoneYam investment, and declared a 10% higher dividend of ZAR 0.53.

• Fintech segment, especially FoneYam, delivered exceptional growth, now contributing 20% of group profit.

• Continued investment in supply chain, technology, and new business formats, positioning for future growth.

Financial highlights

• Revenue up 12% year-over-year to ZAR 95.3 billion; operating profit up 13.2% to over ZAR 11.1 billion.

• Normalised HEPS up 23.4%; dividend per share increased to 53.0cps (+9.2%).

• Gross profit margin improved by 150 bps, nearing 40%, with FinTech margin at 56.4%.

• Return on net assets improved to 24%, with return on equity at 24.7%.

• Net debt to EBITDA at 0.8x, well within internal guidelines.

Outlook and guidance

• Trading post year-end in line with expectations; healthy stock levels and open ports support upcoming peak trading periods.

• Anticipate continued fintech outperformance, with financial services expected to grow faster than retail.

• Guidance for 30% growth in credit books, stable gross profit margins, and EBIT margin target of 12% within two to three years.

• FY26 trading up 10% for first 7 weeks; 250–300 new stores planned.

• Ongoing focus on integrating acquisitions and unlocking value in informal and digital channels.