Half Year 2025 Pepkor Holdings Ltd Earnings Call Transcript
Key Points
- Pepkor Holdings Ltd (FRA:S1VA) reported an 18.9% growth in normalized HEPS earnings, reflecting strong financial performance.
- The company achieved a 12.8% revenue growth, reaching nearly ZAR50 billion, supported by strong like-for-like sales and fintech growth.
- The fintech segment showed impressive growth, with a 34.5% increase, now comprising 60% of the overall group revenue.
- Pepkor's retail credit offering expanded significantly, with 564,000 new accounts opened, marking an 18% year-on-year growth.
- The company maintained strong cash generation, with cash up by 36% compared to the previous year, despite increased investments in inventory and books.
- Inventory levels increased by 13%, partly due to building buffer stock and higher value handsets, which could impact cash flow management.
- Shoe City, part of the specialty division, showed disappointing performance, negatively affecting like-for-like sales growth.
- The company faced challenges with negative like-for-like sales in Avenida, impacted by conservative credit granting policies.
- Operating expenses grew slightly higher than usual due to once-off investments and M&A activities, affecting cost management.
- The company experienced a 67% increase in debtor's costs, driven by growth in credit books and increased provisions.
Thank you. Welcome to the interim results presentation for Pepkor for the six months, that ended in March 31, 2025.
As per the usual agenda, I've been restricted to two slides by my team, and I'll just do a quick overview of the results. Then Rihan will take you through the financial performance, and Sean will get into the meat of the strategic implementation of our business. And then finally, I'll be back for the outlook, and then we'll take some questions.
On the results, we are leading with 18.9% growth in normalized HEPS earnings. For those of you who would have noticed that last week we had to put out a SES announcement. It actually showed a higher number than that, but that was compulsory in terms of some of the capital charges that we had to put in the similar time frame last year.
But in terms of measuring the actual results of Pepkor, 18.9% is what what we believe reflects the normalized growth in earnings, and which is certainly very pleasing for us. We, like always solve the customer's
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