Pepkor swings from profit to loss 

Pepkor’s earnings slumped by over 100% in the 2023 financial year and swung from a profit to a loss.

Pepkor released its results for the year ended 30 September 2023 today.

Revenue grew by 7.7% to R87.41 billion, with retail revenue making up the bulk of this figure, contributing R84.24 billion.

The retailer’s operations generated R13 billion in cash in 2023, reflecting an increase of 15.9% on the prior year. 

However, Pepkor made a loss of R1.29 billion for the year – a 121.1% decrease from 2022.

The retailer’s earnings also decreased significantly as basic earnings per share slumped by 121.4% to a loss of 35.4 cents per share.

Headline earnings per share dropped by 8.2% to 129.2 cents per share.

Pepkor’s weaker earnings and profit could be attributed to a substantial rise in debtor’s costs, which increased by 57.3% to R1.71 billion.

In addition, the retailer’s net finance costs increased by 27.1% to R2.8 billion due to higher interest rates and a higher level of net debt following the acquisition of Avenida. 

The retailer said it saw stronger sales performance in the second half of the year, as trading was supported by a 53rd trading week in the company’s South Africa-based clothing and general merchandise retail brands.

“The consumer and operating environment in South Africa continues to pose challenges,” Pepkor said.

“Substantial disruption in port operations is adversely affecting stock inflows following year-end.”

However, the retailer said trading remains resilient and robust when money is injected into the market, such as payment days for social grants, salaries and wages. 

It said the success of the first quarter of FY24 will hinge on the performance of festive and back-to-school trade.

Pepkor declared a dividend of 48.08 cents per ordinary share – a 12.9% reduction from 2022.