South Africa's Pepkor H1 profit seen up 20% as cash-strapped shoppers seek value (updated)

China Cultural Tourism and Agriculture

28/04/2021 07:44

(Adds details)
    JOHANNESBURG, April 28 (Reuters) - South African retailer
Pepkor Holdings  PPHJ.J  said on Wednesday half-year earnings
were expected to rise by at least 20%, supported by growth at
its discount clothing business and a reduction in net debt and
finance costs.
    South African clothing retailers have been hit as a second
wave of COVID-19 infections and job losses constrain
discretionary spending.
    However, Pepkor, majority-owned by Steinhoff  SNHJ.J , is
faring better than others with its focus on budget-conscious
consumers, including more than 17 million South Africans on
welfare and special COVID-19 grants.
    Headline earnings per share (HEPS), the main profit measure
in South Africa, from continuing operations were seen rising by
9.1 cents in the six months ended March 31 from 45.6 cents a
year earlier. 
    Group revenue from continuing operations grew by 8.1% to
36.5 billion rand ($2.54 billion). When revenue from its fintech
businesses' credit books is excluded, revenue growth of 9.9% was
achieved. 
    Conservative credit granting across all credit books in
addition to lower interest rates, negatively impacted growth in
revenue earned from the Tenacity, Connect and Capfin credit
books, Pepkor said. 
    The retailer, which vies with TFG's  TFGJ.J  Jet clothing
chain, said revenue at its clothing and general merchandise
division rose by 8.1%, with the Pep and Ackermans clothing
brands reporting sales growth of 8.8%, or 6.9% on a
like-for-like basis.
    The furniture, appliances and electronics division, which
includes the JD Group, Incredible Connection and Hi-Fi
Corporation brands, reported revenue growth of 12.8%, driven by
technology upgrades and the trend of working and taking lessons
at home, while revenue at its fintech division rose by 3.1%.
    Net debt at March.31 reduced to 6.1 billion rand from the
14.1 billion rand reported a year ago, due to strong cash
generation during the period, Pepkor said. 

($1 = 14.3650 rand)

 (Reporting by Nqobile Dludla; Editing by Subhranshu Sahu and
Louise Heavens)
 ((nqobile.dludla@thomsonreuters.com; +27103461066;))