PEPKOR says trading has been relatively stronger in most brands since the start of January, supported by the shift in the back-to-school campaign.     Supplied
PEPKOR says trading has been relatively stronger in most brands since the start of January, supported by the shift in the back-to-school campaign. Supplied

Pepkor shows double-digit sales growth in first three weeks of 2020

By Sandile Mchunu Time of article published Jan 27, 2020

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DURBAN - Pepkor Holdings reported a slight increase in sales in its two divisions: Pep and Ackermans, in the three months to end December as a result of the late start to the school year.

The group said Pep and Ackermans brands reported sales growth of 6.4percent with like-for-like sales growth of 3.2percent.

“Sales performance was negatively impacted by a shift in ‘back-to-school’ trade from December 2019 to January 2020, as a result of the later start to the school year” the group said.

However, the group reported double-digit growth in sales in the first three weeks of January.

Since the beginning of January, Pepkor said trading was relatively stronger in most brands, supported by the shift in the back-to-school campaign.

“On a relative basis, Pepkor continues to perform well in context of the current retail market, underscoring the successful execution of its customer value proposition and focus on providing value to customers.”

Looking ahead, the group said the current macro-economic and employment landscape was not expected to improve in the near future. However, it remains positive and focused on the execution of its strategy to provide value to customers, market share expansion and enhancing efficiencies in the respective divisions.

Pepkor, a subsidiary of Steinhoff International, has a portfolio of retail brands, such as Pep, Ackermans, Tekkie Town, Bradlows and HiFi Corporation.

In the trading update released on Friday, Pepkor reported a 7.6percent increase in revenue from continuing operations to R20.9 billion, with the clothing, footwear and homeware (CFH) retail brands successfully defending and expanding their market shares, according to the latest RLC data.

The group said retail selling price inflation in core CFH product categories increased to 9.1 percent, driven by fluctuations in exchange rates.

Pep and Ackermans expanded their retail space by 4.8percent compared with the same quarter a year earlier and said new stores were performing in line with its expectations.

Pep Africa, which contributes 3percent to group revenue, continued to consolidate against difficult macroeconomic conditions across most countries of operation.

“High levels of product inflation due to depreciating currencies in Angola, Nigeria and Zambia impacted consumer affordability. Constant currency sales declined by 2.8percent and like-for-like sales reduced by 6.4percent, translating to a decline in sales of 12.7percent in rand terms,” the group said. The group’s speciality division reported sales growth of 1.6percent, with like-for-like sales declining by 0.6percent.

The JD Group reported a 3.6percent increase in revenue with retail sales up by 2.2percent and like-for-like sales declining by 0.7 percent while the building materials division reported a decline of 4.1percent in sales, with and like-for-like sales down by 2.9percent.

The fintech segment reported revenue growth of 44.4percent, including Capfin’s contribution.

Pepkor shares rose 0.97 percent to close at R16.72 on Friday.

BUSINESS REPORT 

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