PEPKOR HOLDINGS LIMITED - Trading Statement For The Year Ending 30 September 2020 And Liquidity Update

            
PPH PEP01 PEP02
Trading Statement For The Year Ending 30 September 2020 And Liquidity Update

Pepkor Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: PPH
Debt Code: PPHI
ISIN: ZAE000259479
(Pepkor, the Company or the Group)

TRADING STATEMENT FOR THE YEAR ENDING 30 SEPTEMBER 2020 AND LIQUIDITY
UPDATE

Trading statement

In terms of the JSE Limited (JSE) Listings Requirements (the Requirements), a listed company
is required to publish a trading statement as soon as it becomes aware that a reasonable degree
of certainty exists that the financial results for the financial period to be reported on next will differ
by at least 20% from the financial results for the previous corresponding period.

As reported in the Groups interim results published on the JSE Stock Exchange News Service
(SENS) on 27 May 2020, the COVID-19 pandemic is expected to have a negative impact on the
Groups performance and results for the year ending 30 September 2020. The unprecedented
circumstances and volatile trading environment continue to impact the Groups forecasting ability.

Pepkor hereby advises shareholders and noteholders that a reasonable degree of certainty exists
that its earnings per share (EPS) and headline earnings per share (HEPS) for the year ending
30 September 2020 will decrease by at least 20%.

    -   EPS is expected to decrease by at least 12.5 cents per share (20%) when compared to
        the EPS of 62.6 cents reported for the year ended 30 September 2019 (the Previous
        Period); and

    -   HEPS is expected to decrease by at least 19.4 cents per share (20%) when compared to
        the HEPS of 96.8 cents reported for the Previous Period.

The decrease in EPS and HEPS can be attributed to the following factors:

    1. The Group implemented IFRS 16: Leases (IFRS 16) on 1 October 2019 using a modified
       retrospective approach with no restatement of prior period reported results; and
                                                                                                        
    2. The impact of the COVID-19 pandemic has impacted the performance in many areas of
       the Group, most notably through lost sales and increased provision levels on credit books.
       This has contributed to the likely impairment of carrying values of goodwill and intangible
       assets.

Further guidance as to the range by which the EPS and HEPS are likely to decrease will be
provided once the required degree of certainty in terms of the Requirements has been
established.

The financial information on which this trading statement is based, has not been reviewed or
reported on by the Company's external auditors.


Liquidity update

As stated in the Trading Update published on SENS on 24 July 2020, the Groups liquidity
benefited from strong trading since the relaxation of lockdown measures, pro-active expense
management, conservative credit granting, better-than-expected credit book collections and the
successful completion of an accelerated bookbuild which raised R1.9 billion.

This allowed early settlement of the R1.5 billion bridge term loan facility which was due for
repayment in August 2020 and early settlement of R4.0 billion of the total R6.0 billion preference
share funding due to mature in May 2022. The Group has made significant progress in its ambition
to degear the balance sheet and there is therefore no risk of debt covenants being breached at
30 September 2020.

The process to refinance R5.0 billion in debt due for repayment in May 2021 was successfully
concluded and implemented on 30 September 2020, and the debt is now repayable in September
2023. In addition, the R1.0 billion bridge revolving credit facility originally due to expire in
November 2021, has been extended to September 2023.

As part of the same process, debt covenants were amended to create sufficient headroom and
enhanced flexibility going forward.


Parow
15 October 2020

Equity Sponsor
PSG Capital
                                                                                             
Debt Sponsor
Rand Merchant Bank (A division of Firstrand Bank Limited)




                                                       

Date: 15-10-2020 10:00:00
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