Pepkor loses about R5bn in sales from store closures, but improves growth in revenue
DURBAN - PEPKOR – whose brands include Pep Stores, Ackermans and Incredible Connection – said yesterday that it had lost about R5 billion in sales during the year to the end of September, hurt by store closures during the hard lockdown.
The retail group reported a 3.6 percent growth in revenue to R63.7 billion despite the Covid-19 challenges and store closures.
Chief executive Leon Lourens said Pepkor was very happy with exceptional sales performance since its stores re-opened after the hard lockdown.
“Our discount and value business model provided much-needed affordability to our customers during these tough economic times. Our expansive store footprint helped our customers to shop for their basic and essential products closer to their homes. We are also happy to have kept our expense growth under control and we continue to trade at the lowest cost of doing business in the market,” Lourens said.
Pepkor experienced market share growth of 240 basis points in clothing, footwear and homeware products since April, according to the Retailers’ Liaison Committee.
Its operating profit, items, decreased by before capital 18.4 percent to R5.3bn. The group reported a loss of 62.5 cents a share. Earnings were impacted by the impairment of goodwill and intangible assets of R4.8bn.
“The impairment is a result of constrained future growth expectations in Pep Africa, Speciality, Tekkie Town and the JD Group, in addition to an increased weighted average cost of capital,” the group said.
Its headline earnings per share declined by 21 percent to 75.4c.
Pepkor did not declare a dividend as a result of preserving cash.
The clothing and general merchandise segment reported a 1.4 percent increase in revenue to R45.6bn, including a 12.1 percent growth in the last quarter, recovering from a 15.9 percent decline during the third quarter, while operating profit decreased by 15.6 percent to R5.2bn.
Pepkor shares closed 1.82 percent lower at R13.45 yesterday.