Pepkor’s defensive discount and value positioning underpinned resilient performance.
1. STATUTORY HIGHLIGHTS FROM CONTINUING OPERATIONS – INCLUDING THE
ADOPTION OF IFRS 16
• Revenue increased by 6.5% to R37.6 billion.
• Operating profit before capital items increased by 17.2% to R4.0 billion.
• Headline earnings per share decreased by 13.6% to 44.3 cents per share.
• Basic earnings per share decreased by 17.7% to 42.1 cents per share.
• The Group adopted IFRS 16: Leases during the current reporting period, using a
modified retrospective approach with no restatement of prior period reported results.
This had a material impact on the Group’s statutory results for the current period. To
form a meaningful assessment of Group performance, shareholders are referred to
Pepkor’s full results announcement, available on the Pepkor website at
www.pepkor.co.za.2. HIGHLIGHTS FROM CONTINUING OPERATIONS – EXCLUDING THE ADOPTION
OF IFRS 16
• Revenue increased by 6.5% to R37.6 billion.
• Operating profit before capital items increased by 0.3% to R3.4 billion.
• Headline earnings per share decreased by 3.8% to 49.3 cents per share.
• 145 new stores opened, increasing stores to 5 498 stores.
3. OVERVIEW
The Pepkor Group achieved commendable results for the six months ended
31 March 2020 as its proven defensive discount and value market positioning,
disciplined focus on customer needs and leading low cost of doing business
underpinned performance.
The retail environment was constrained with low consumer spending, high levels of
unemployment, load shedding and low economic growth. This was exacerbated during
March with the spread of the Coronavirus (COVID-19) across South Africa and the
globe – resulting in the declaration of a national state of disaster and the implementation
of a national lockdown effective from 27 March 2020 until 30 April 2020.
4. OUTLOOK
The duration and evolution of the COVID-19 pandemic and the related impact on the
Group’s trading in the near to medium term remains uncertain. It is expected that
COVID-19 and the lockdown measures will severely impact the South African economy,
the retail sector as a whole, and the Pepkor Group as consumers face increased
unemployment and hardship.
Pepkor is confident that it is well positioned to gain market share in the post-COVID-19
‘new economy’ with its defensive discount and value positioning being more resilient
through its focus on babies’ and children’s clothing and large contribution of basic and
replenishment products.
A live webcast of the results presentation will be broadcast at 11:00 am (SAST) on
27 May 2020. A registration link for the webcast is available on the Company’s website:
www.pepkor.co.za. The presentation will be made available on the Company’s website
prior to the commencement of the webcast.
5. DIVIDEND DECLARATION
No interim dividend is declared as in prior interim periods. Based on heightened levels
of prudence applied by the board and the focus on liquidity preservation and allocation
of resources, it is not expected that a full year dividend will be declared for FY20.
6. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement and does not
contain full or complete details. The full announcement can be found at:
https://senspdf.jse.co.za/documents/2020/jse/isse/pphe/H1FY20.pdf Copies of the full announcement are also available for viewing on the company’s
website at
https://www.pepkor.co.za/wp-content/uploads/2020/05/Pepkor-unaudited- interim-results-for-the-six-months-ended-31-March-2020.pdf, or may be requested in
person at the company’s registered office or the office of the equity sponsor, at no
charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on
consideration of the full announcement, as a whole.
27 May 2020
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