Pepkor Holdings, which is trading under a new guise after changing its name from Steinhoff Africa Retail earlier in August, said on Tuesday the troubles its parent were experiencing had not prevented it from growing sales or investing in new stores.
Pepkor said it grew revenues by 13.8% to R48.9bn in the nine months ended June. Shares in the company, majority owned by Steinhoff International, gained 2.1% to close at R17.05 on Tuesday. But the company’s shares have yet to recover from the sell-off that ensued after Steinhoff warned the market of accounting irregularities in early December 2017. Prior to that announcement, Pepkor’s shares were trading above R25.
Pepkor said in a statement that on a comparable basis, whereby the pre-acquisition contributions from Tekkie Town and Building Supply Group were added in, group revenues in the nine-month period rose 9.2%.
The Pep and Ackermans brands together contributed merchandise sales growth of 7.7% and like-for-like growth of 2.7%. Retail space increased by 5.4% as the two chains opened 148 new stores between them. But sale prices fell 5% in the clothing, footwear and homeware product categories at Pep and Ackermans, and this dented growth as volumes rose 9.6%, or 5.4% on a like-for-like basis.
Pepkor said deflationary pressures were likely to ease in the fourth quarter, adding that in the first month of the current quarter, being July, the two chains "showed particularly strong like-for-like performance". Pep Africa, which accounts for 4% of group revenue, "continues to experience challenging operating conditions in addition to deflation".
Like-for-like sales in the third quarter fell 14.7%, a better performance than the six months ended March, when sales declined 16.2%.
Sales growth momentum "continued" in the speciality fashion and footwear unit, which mustered growth of 14%, or like-for-like growth of 7.4%.
"The interim management team at Tekkie Town has successfully stabilised the business and operations continue in line with expectations," Pepkor said.
Earlier in August, Tekkie Town founder Braam van Huyssteen said he would launch Mr Tekkie in November.