Pepkor Expands Beyond Retail With Profits And Banking Vision, JSE: PPH Share Price Stagnates
Pepkor posted an impressive rise in annual earnings, supported by strategic execution, fintech expansion, and plans to establish a fully...
Quick overview
- Pepkor Holdings reported a 14.8% increase in full-year earnings, driven by strategic initiatives and fintech expansion.
- Headline earnings per share rose to 161 cents, reflecting improved operational efficiency and profitability.
- The company plans to establish a fully-fledged bank in South Africa, having received regulatory approval and acquired necessary technology.
- Pepkor's fintech division saw significant growth, with financial services expanding by 61.4% and total group revenue increasing by 12%.
Pepkor posted an impressive rise in annual earnings, supported by strategic execution, fintech expansion, and plans to establish a fully-fledged bank in South Africa.
Pepkor Delivers Strong Full-Year Growth
Pepkor Holdings, the South African discount retail giant behind the PEP and Ackermans brands, reported a notable 14.8% increase in full-year earnings. The improved performance was largely driven by focused strategic initiatives and the continued rapid expansion of its fintech operations, reinforcing the group’s evolving business model beyond traditional retail.
Headline earnings per share from ongoing operations climbed to 161 cents for the year ended September 30, compared to 140.2 cents in the previous year. This improvement reflects both operational efficiency and the increasing contribution of higher-margin segments.
Sean Cardinaal, the group’s Chief Operating Officer, highlighted that retail remains the backbone of Pepkor’s revenue base. He emphasized the company’s ability to generate consistent cash flow and pointed to the long-term potential created by its scale and integration across fintech, telecommunications, and informal market platforms, which together create additional avenues for expansion.
Share Price Reaction And Market Position
Pepkor’s share price on the JSE moved higher immediately after the results were released, before retreating to close the session at R26. Despite the short-lived jump, the stock continues to trade within a narrowing range throughout 2025. Technical support around the 100-day simple moving average has helped stabilize the price, but the overall direction remains unclear as investors await a stronger catalyst.
Banking Plans And Fintech Expansion
In a major strategic development, Pepkor received approval from the Prudential Authority to move forward with plans to establish a fully-fledged bank in South Africa over the coming years. Chief Financial Officer Riaan Hanekom explained that this project has been in development for approximately two years.
A key step toward this goal was the acquisition of Cloudbadger in October 2023. The company provides modern banking software platforms, offering Pepkor a cost-effective and scalable technological foundation upon which to build its banking ambitions.
This move places Pepkor in increasingly competitive territory. Established players and retail-linked banks are stepping up their presence, with Old Mutual launching its own bank, Pick n Pay partnering with TymeBank for in-store services, and Shoprite expanding money transfer solutions that already serve millions of customers.
Pepkor’s entry into the banking landscape not only intensifies competition but also underscores how traditional retailers are reshaping themselves into broader financial service ecosystems.
Pepkor Full-Year Earnings Performance
- Pepkor Holdings reported a strong 14.8% increase in full-year earnings, reflecting solid execution across its core operations
- The performance was supported by targeted strategic initiatives and accelerating momentum in its fintech arm
Headline Earnings Per Share (HEPS)
- Headline earnings per share from continuing operations rose to 161 cents
- This marked a notable improvement from 140.2 cents in the previous year
- The increase highlights better profitability and improved operational efficiency
Fintech Segment Growth
- The fintech division recorded 31.1% growth, reaching $960 million
- Financial services expanded sharply by 61.4%, reflecting higher customer adoption
- Flash, the group’s informal market platform, grew 13.7%, strengthening its footprint in township and rural markets
Improvement In Gross Profit Margin
- The group’s gross profit margin climbed by 150 basis points to 39.8%
- This expansion was mainly supported by the rapid growth of the higher-margin fintech business
- Better cost management and product mix also contributed to the stronger margin profile
Strategic Expansion And Brand Development
- Pepkor acquired Choice Clothing, allowing entry into new customer segments and demographics
- The group launched the Ayana brand, targeting the growing adult wear market
- These moves strengthen Pepkor’s brand portfolio and broaden its customer base
Revenue And Segment Performance
- Total group revenue increased by 12%, reaching $5.39 billion
- The clothing and general merchandise division expanded by 8.9%
- The furniture, appliances, and electronics segment posted 7.2% growth, showing steady demand in durable goods
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