Pepkor Holdings Limited (PPH) Investor presentation summary

Financial performance highlights

• Revenue reached R85.1bn, up 9.2% on a normalised and comparable basis, with gross profit at R32.6bn and operating profit at R9.8bn, reflecting a 17.4% increase.

• Headline earnings per share rose 10.3% to 140.2c, and cash generated amounted to R11.9bn, with a 22.3% return on net assets.

• Market share gains and improved margins were achieved, with tangible results in fintech and strong cash conversion at 79%.

• Net debt reduced to R5.0bn in FY24, with a net debt-to-EBITDA ratio of 0.7x and EBITDA-interest cover of 6.2x.

• Q1FY25 saw robust sales growth of 12.1% and continued trading momentum into January 2025.

Segment and operational overview

• Clothing and general merchandise contributed 72% of group revenue, with fintech and financial services at 15% and 13% respectively.

• Retail credit books remained stable, with provision levels and NPL ratios largely unchanged year-on-year.

• Unsecured lending and cellular rental books maintained ROE above 20%, with prudent provisioning.

• Cash sales dominated, especially in PEP and Ackermans, while credit sales were higher in the Lifestyle Group.

• Retail footprint expanded with a net increase in stores, particularly in PEP, Ackermans, and Avenida.

Capital allocation and strategic initiatives

• Capex remained steady at around 2.9% of revenue, focused on organic growth, retail stores, and credit books.

• Dividend cover maintained at 3x earnings, with 48.5cps declared.

• Strategic M&A activity included the disposal of non-core assets and acquisitions in furniture and clothing, with further implementation expected in H2FY25.