Pepkor recorded strong interim results, achieving double-digit revenue expansion across all segments. However, the results were supported by the various acquisitions completed at the end of FY25. Clothing and General Merchandise (CGM) showed good growth, coming off a high base in the prior year. The Ackermans business slid back in 1H26, with low growth and negative like-for-like development. Despite this, CGM (excluding Avenida) delivered good market share gains, expanding by 11.1% y-y in 1H26, ahead of the Retailers’ Liaison Committee’s (RLC) 3.1% y-y. Excluding acquisitions, CGM still expanded by an impressive 6.3% y-y.
The Pepkor Lifestyle business reported strong revenue growth, supported primarily by the non-RSA component of the SHP Furniture acquisition. The Home division was the biggest beneficiary of the acquisition, as growth excluding OK Furniture and House & Home was low at 1.3% y-y. However, this was off a high base in the prior year. The ongoing saga of the SHP Furniture acquisition, related to the intervention of competitor Lewis Group (LEW), may conclude in July. However, LEW appears to be in the stronger position, after receiving a favourable ruling in its Constitutional Court case. From PPH’s perspective, even if the deal cannot be concluded, the group has made several strategic investments, such as an automated dark store and in-housing of logistics services, which should position Lifestyle for future growth.
Financial Services continues to be a strong revenue driver for the group, supported by investment in the various credit and lending books. There were many collection issues affecting various books in 1H26, resulting in elevated provisioning levels. In the Informal segment, the Flash business showed slow growth in the trader division, but this was offset by good results in the aggregation side. We expect PPH to consider potential acquisitions in the B2B market to complete Flash’s value offering.