Pepkor (PPH) 1H24 – Results Snapshot

Diluted HEPS from continuing operations 74.0cps (-2.9% y-y).
Revenue growth from continuing operations of 9.5% y-y to R43.3bn, driven by the Clothing and General Merchandise segment (+7.5% y-y) and FinTech (+24.5% y-y).
GPM expanded by 200bps to 38.1%. GPM benefitted from improved full-price sales and lower markdown activity.
Expense growth of 18.8% y-y with expense-to-sales ratio up 210bps to 27.1%. Operating expenses inflated by the non-recurring IFRS 16 lease modification gain of R392m and substantial customer acquisition expenses incurred.
OPM decreased by 60bps to 11.9%.
Gross debt increased to R13.1bn (1H23: R12.4bn) with net cash increasing to R1 177m (1H23: R884m).
No dividend (1H23: no dividend).
Group opened net 111 stores expanding its footprint to 5 823.
Group’s overall market share expanded on a three-, six-, and 12-month basis, with a recovery in Ackermans for babies and kidswear.
The Building Company (TBCo) disposal was announced in February, for a consideration of R1.2bn.