Pepkor gains market share on low price appeal

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Pepkor gains market share on low price appeal

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Published Date: 2019-05-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Pepkor gains market share on low price appeal

The retail giant says first-half sales fell short of expectations in a challenging trading environment.

Pepkor claims to have gained market share in the first-half of its financial year as its low prices gained appeal with cash-strapped consumers. However, sales growth for the six months to end-March fell short of expectations, with the late Easter contributing to a very challenging retail environment over the period.

The group's clothing and general merchandise division, which includes retailers PEP and Ackermans, grew revenue by 5.2% to R23.1 billion, contributing two-thirds of group revenue for the six months to end-March. Its Speciality division reported sales growth of 9.4% and like-for-like growth of 4.1% as strong sales at John Craig and Refinery made up for tougher conditions at Tekkie Town and Shoe City.

Within its furniture, appliances and electronics division, JD Group increased revenue by 7.2% to R5 billion. The Building Company reported muted sales growth of 1.5% and like-for-like growth of 2.3% as the market for building materials experienced its worse contraction in more than a decade.

Group revenue rose 7% to R35.3 billion and operating profit jumped 25.2% to R3.4 billion, flattered by a R500 million provision in the prior period that was made to cover a corporate guarantee and associated loans. On a comparable basis, operating profit increased by 6.9%. Similarly, headline earnings per share increased by 39.9% to 50.7c but were 3.4% higher at 42.4c on a comparable basis. Like last year, it's not paying an interim dividend.

Its shares fell 2.2% to R17.32 yesterday.





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