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Annual Results For The Year Ended 30 September 2019 And Dividend Declaration
PEPKOR HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: PPH
ISIN: ZAE000259479
(“Pepkor”, “Company” or the “Group”)
ANNUAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2019 AND DIVIDEND
DECLARATION
1. STATUTORY HIGHLIGHTS
• Revenue from continuing operations increased by 9.0% to R69.6 billion.
• Operating profit from continuing operations and before capital items increased
by 15.6% to R6.8 billion.
• Total headline earnings per share increased by 14.5% to 96.8 cents per share.
• Impacted by an impairment charge pertaining to The Building Company business, total
earnings per share decreased by 25.0% to 62.6 cents per share.
• A scrip dividend was declared, with a cash alternative of 20.9 cents per share (27.8
cents in the prior year). This is consistent with the previously announced dividend
policy of a dividend being covered three times by earnings.
• Pepkor’s statutory results include the impact of BVI-related costs in the current and
prior years, in addition to the implementation of IFRS 9 in the current year.
Shareholders are referred to Pepkor’s annual results presentation, available on the
Pepkor website at www.pepkor.co.za, for further information on comparable results.
2. OVERVIEW
Pepkor achieved a commendable set of operating results for the 2019 financial year
(FY19), despite a very difficult retail environment where consumer spending remained
constrained, fuelled by high levels of unemployment and low economic growth. The
Group’s defensive discount and value market positioning, disciplined focus on customer
needs and low cost of doing business proved to be resilient in this challenging
environment.
Pepkor’s strategy of providing the right product, at the best possible price, in accessible
locations continues to underpin Pepkor’s performance, resulting in continued market
share gains in most of the retail brands. Creating value for our customers and improving
their lives in the process remains the primary focus for each of the retail brands in the
Group.
Pepkor continued its expansion and opened 338 new stores, expanding the Group’s
footprint to 5 415 stores. The Group’s flexible store formats enable it to open stores closer
to its customers’ homes, saving them transport costs and creating opportunities for more
frequent customer spend.
With 56 100 employees, the Group remains one of the largest employers in the South
African retail sector and will continue to focus on capitalising on its core competencies
and assets to capitalise on the opportunities that the current market conditions present.
3. OUTLOOK
Trading subsequent to year-end remains volatile and management is of the opinion that
the difficult trading environment will persist as consumer spending continues to be
constrained. Notwithstanding, the Group is cautiously optimistic about growth for the
coming year and its merchandise-buying plans reflect this.
The current environment provides opportunities for market share expansion and the
strong customer value propositions of Pepkor’s retail brands is expected to remain a
competitive advantage.
Organic expansion opportunities remain top of mind, including store footprint expansion,
the development of new retail formats and the creation of new channels through which to
serve our customers. The Group will continue to focus on market share expansion and
improving operating cost efficiencies.
A live webcast of the results presentation will be broadcast at 13:00pm (SAST) on
25 November 2019. A registration link for the webcast is available on the Company’s
website: www.pepkor.co.za.
4. DIVIDEND DECLARATION
Based on the stated ambition to reduce Pepkor’s gearing to one times net debt-to-
EBITDA, the board has elected to declare a scrip dividend to shareholders in respect of
the year ended 30 September 2019 with a cash alternative of 20.9 cents (27.8 cents in
the prior year).
The dividend will be payable to the holders of ordinary shares in the share capital of the
Company and recorded in the securities register of the Company on 24 January 2020.
Shareholders will, be entitled to elect to receive a gross cash dividend of 20.9 cents per
share held in respect of all or part of their ordinary shareholding, instead of the scrip
dividend (‘cash dividend’), payable out of the company’s distributable retained profits.
The finalisation of information, including the ratio applicable to the scrip dividend is
expected to be released on SENS on or about Tuesday, 14 January 2020. A circular
setting out the terms and salient dates of the scrip dividend and cash dividend alternative
will be published separately in due course.
The last date to trade in order to be eligible to receive the dividend will be 21 January
2020 and the ex-dividend date will be 22 January 2020. The dividend will be paid and
broker accounts updated, as the case may be, on 27 January 2020.
Pepkor’s two largest shareholders, representing 79.8% of the Group’s issued share
capital, have committed to receive the scrip dividend.
5. 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 (“Full
Announcement”) and does not contain full or complete details. The Full Announcement
can be found at: https://senspdf.jse.co.za/documents/2019/JSE/ISSE/PPHE/FY2019.pdf
Copies of the Full Announcement is also available for viewing on the Company’s website
at https://www.pepkor.co.za/wp-content/uploads/2019/11/pepkor-audited-results-for-the-
year-ended-30-September-2019.pdf or may be requested in person, at the Company’s
registered office or the office of the 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.
25 November 2019
Sponsor
PSG Capital
Date: 25-11-2019 07:30:00
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