Pepkor Holdings lost R5bn in revenue because of lockdown
Share this article:
Pepkor Holdings said on Friday it lost R5 billion in revenue in April as a result of the hard lockdown implemented by the government in response to the Covid-19 outbreak.
The retailer said in a trading update the lockdown had hurt its overall revenue, declining by 1.5 percent to R52.3bn for the nine months to end June.
“This compares to revenue growth of 6.5 percent achieved for the six months to end March and therefore highlights the negative impact of Covid-19 and the national lockdown during the third quarter where group revenue reduced by 17.2 percent,” Pepkor said.
However, Pepkor achieved a very strong trade in May and June as lockdown measures eased and the group attributed it to pent-up demand, social grant payments as well as the value propositions and market positioning of the group’s brands.
Pepkor has maintained strong trading momentum into July but said it is uncertain how long these levels of performance are possible as the impact of Covid-19 on the economy and employment unfolds.
“The group is expecting a constrained retail environment in the next 18 months, but will continue to focus on its aggressive growth in market share as consumers are forced to reduce and reprioritise spending,” the group said.
Pepkor has more than 5 400 stores operating across 11 African countries, and saw its revenue coming under pressure particularly in the third quarter.
In the clothing and general merchandise segment, revenue declined by 1.7 percent for the nine-month period, negatively impacted by a decrease in revenue of 15.9 percent during the third quarter.
However, the group said sales levels for Pep and Ackermans were very positive during May and June after stores reopened.
In the nine-month period Pep and Ackermans reported a decrease of 0.4 percent in sales, with a like-for-like sales decline of 3.5 percent.
The group said retail space expanded by 3.1 percent year-on-year with 22 new store openings during the third quarter.
Pep Africa’s constant currency sales declined by 11.5 percent, while like-for-like sales decreased by 14 percent during the period, impacted by lockdown and adverse macroeconomic conditions in most countries of operation. At actual rates, sales decreased by 19.8 percent.
The Speciality business reported a 7.4 percent decline in sales, with like-for-like sales down by 9.8 percent during the period. However, like-for-like May and June sales were up by 6.3 percent and 11.2 percent, respectively.
The JD Group reported a 6 percent decline in revenue percent for the nine-month period which includes a decrease of 21.8 percent during the third quarter while sales for the nine months declined by 7.6 percent, a 9.5 percent decline in like-for-like sales.
The Building materials reported a 17.2 percent decline in sales during the period while third quarter sales fell by 41.9 percent.
The share closed 1.31 percent lower at R10.54 on Friday.