Pep, Ackermans owner expects big profit boost

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Steinhoff-controlled Pepkor now expects half-year headline profit growth of between 38% and 58%. 

This is considerably more than its previous trading statement, released two weeks ago, which forecast a gain of at least 20% from its continuing operations. Pepkor owns Ackermans, Pep as well as JD Group, including brands like Joshua Doore, Incredible Connection and Hi-Fi Corporation.

The profit gain is thanks to a strong trading performance, with Pepkor previously saying revenue from continuing operations rose by more than 8% to R36.5 billion for the six months to end-March – compared to the same half-year in the previous period, which was still largely unaffected by the pandemic.

In April last year, the first month of hard lockdown, sales at Pep and Ackermans plummeted 96%. Still, the company increased its sales for the year to September by almost 4% to R63.7 billion, while its headline profit rose by 21%.

It also managed to reduce its net debt by R6.9 billion to R7.1 billion last year.

This big reduction in debt and related finance costs helped to bolster its profit for the past six months, the company said on Tuesday.

Its share price is currently almost 80% stronger than a year ago, and back at pre-pandemic levels. Following the trading update, it was up more than 4% to R17.75 by mid-morning on Tuesday.

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