Pepkor increases profits with home improvement and electronic goods

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Many analysts are singling out Pepkor as the retailer to watch as peers under the strain that Covid-19 has put on clothing brands.
Photo: Supplied by Pepkor
Many analysts are singling out Pepkor as the retailer to watch as peers under the strain that Covid-19 has put on clothing brands. Photo: Supplied by Pepkor

Pep and Ackermans owner Pepkor said it saw increased profits for its electronics and furniture as consumers worked and studied from home.

In an update to shareholders on Wednesday, the discount retailer said furniture, appliances, and electronics segment increased revenue by 12.8% to R5.7 billion for six months ended 31 March. The sale of merchandise increased by 16.4% as consumers continue to upgrade technology to support working or studying remotely and investing in their homes in terms of furniture and appliances.

Trading in a period when SA was grappling with a second wave of Covid-19 as well as a delayed start to the academic year, Pepkor increased group revenue from continuing operations by 8.1% to R36.5 billion for the half.

The group said during the six months 108 new stores were opened while 180 stores closed, including 111 John Craig stores.

The group's clothing and general merchandise segment increased revenue by 8.1% to R26.3 billion for the half.

Pep and Ackermans as a collective increased sales by 8.8% and continued to grow market share in a declining apparel retail market.

Retail space expansion in Pep and Ackermans amounted to 2.6% year-on-year. This included the opening of 65 new stores.

Headline earnings per share are expected to increase by at least 20%. The retailer attributed the increase in headline earnings per share to strong trading performance in addition to the marked reduction in net debt and related finance costs during the period.

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