This article first appeared on GuruFocus .
Release Date: May 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Pepkor Holdings Ltd ( STU:S1VA ) reported a 12.1% growth in normalized HEPS for the six months ended March 31, 2026.
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The company expanded its retail platform by opening 89 new stores, bringing the total to 6,657 stores.
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Financial services segment showed exponential growth, driven by FoneYam with 1.3 million activations.
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Approval for a banking license was obtained, indicating future expansion into banking services.
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The informal market platform performed well, with a throughput of 20.3% or ZAR34.7 billion for the six months.
Negative Points
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Shoe City is treated as a discontinued operation, impacting the focus on continuing operations.
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Ackermans experienced a decline in like-for-like sales, with a negative 0.5% growth.
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The company faced challenges in the call center affecting collections, impacting bad debts by ZAR180 million to ZAR200 million.
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Net debt to EBITDA increased to 14.9%, though expected to normalize by year-end.
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Cash conversion was below the target of 80%, at 68%, due to faster-than-anticipated growth in FoneYam.
Q & A Highlights
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Q: Can you provide more details on the impact of the M&A activities on the financial results? A: Riaan Hanekom, CFO, explained that the M&A activities significantly impacted the financial results, particularly in revenue growth, which saw a 13.2% increase. Excluding M&A, the top-line growth was around 8.5%. The acquisitions also affected operating profit, with a 10% growth when excluding M&A impacts.
Q: How is the new banking initiative progressing, and what are the expected costs? A: Riaan Hanekom, CFO, stated that the banking initiative is on track, with a planned launch to the general public around April next year. The total expected cost is not more than ZAR920 million, including both OpEx and CapEx, until the launch.
Q: What are the key drivers behind the growth in the Financial Services segment? A: Riaan Hanekom, CFO, highlighted that the Financial Services segment's growth was driven by Abacus, Capfin, and FoneYam, with Abacus growing by more than 100%. The segment's revenue growth was 38.7% when excluding the insurance book.
Q: Can you elaborate on the performance of the informal market platform? A: Pieter Erasmus, CEO, mentioned that the informal market platform, now disclosed separately, performed well with a throughput of 20.3% for the six months, amounting to ZAR34.7 billion.
Q: What challenges did Ackermans face, and how are they being addressed? A: Sean Cardinaal, COO, noted that Ackermans faced challenges with a change in customer shopping behavior, insufficient RSP inflation, and product mix issues. The team is addressing these by testing alternative payment types and managing inflow inflation more deliberately.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
