Pepkor (PPH) – Penny Pinching

Trading conditions deteriorated substantially in 1H19 which resulted in Pepkor reporting volume declines. We look at market share movements of clothing retailers and show that PPH gained market share, but believe it may not have gained most of the market share lost by Edgars. We believe there is room improve JD Group’s profitability levels but caution against the relaxing of credit lending criteria as a strategy used to drive topline growth.