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Pep and Ackermans owner grows profit by 28%

Pepkor grew its headline earnings per share by 28% to 91.5 cents in the six months to end-March, with revenue up 3% to R42 billion. The Pep and Ackermans owner did not declare an interim dividend.

Pepkor said it achieved “ongoing organic growth” thanks to its store expansion programme, with another 144 new stores opened in the period, pushing its global store footprint to 5 708 at the end of March. It still plans to open 300 stores altogether in the financial year.

It said its newly acquired Brazilian retailer Grupo Avenida’s operating performance “exceeded expectations”. 

“Good progress was made in preparing the business for growth, while improved working capital, in particular inventory levels, supported sales performance. Avenida currently operates 130 stores.”

One of Pep’s three distribution centres was damaged in the recent flooding in KwaZulu-Natal. The group said that this interruption, in addition to a very challenging supply chain environment at present, will have an impact on service levels in the business. Operations at the centre are expected to resume at the end of May.

Following the July unrest, Pepkor has reopened 479 of the 549 stores that were damaged.

The reopening of the remaining 70 stores is delayed due to the need for property owners to rebuild stores or shopping centres.

Pepkor said the results excluded the benefit of the global settlement by its majority shareholder Steinhoff, which amounted to R429 million, or 12 cents per share. Its exposure came through management investment company, Business Venture Investments, which was invested in Steinhoff shares. Pepkor provided a financial guarantee, which was converted to a loan in 2020.

“The successful implementation of the Steinhoff global settlement resulted in the recovery of this exposure. In addition, all related claims and litigation, as previously reported in Pepkor’s annual financial statements since 2018, were settled.”

Steinhoff owns 50.6% of Pepkor.

Pepkor’s share price rose almost 3% in early trading on Friday.

Article Source: Fin24

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