Pepkor's strategic moves pay off with record 2025 earnings and revenue growth
JSE-listed Pepkor Holdings Limited has announced record profit growth for the year ended 30 September 2025, delivering a strong financial performance underpinned by diligent operational execution and the successful implementation of key strategic initiatives.
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The group reported a 12.0% increase in revenue to R95.3bn, while operating profit increased by 13.2% to R11.1bn.
Driven by market share gains in its core retail business and a surging performance in its fintech segment, the group declared a dividend of 53.0 cents per share, up 9.2%.
Normalised headline earnings per share (HEPS) grew by 23.4% to 161.0 cents, highlighting the group’s ability to generate sustainable value despite a dynamic economic landscape and while executing a number of strategic initiatives.
Pieter Erasmus, chief executive officer of Pepkor Holdings Limited, said, “We delivered record profit growth in the 2025 financial year. These results evidence the successful execution of our strategy to entrench our unique business model, leveraging our physical retail footprint to fuel a digital ecosystem anchored in solving customer needs.”
He adds, “We continue to build a unique position of trust among millions of our customers, solving their needs and making life’s essentials affordable and accessible. Our core retail business outperformed the market, while our strategic focus on digital inclusion and fintech has added scalable future growth opportunities that are now delivering tangible results.”
Financial highlights
- Revenue up 12.0% to R95.3bn
- Operating profit (before capital items) increased 13.2% to R11.1bn
- Gross profit margin expanded by 150 basis points to 39.8%
- Headline earnings per share (HEPS) increased 14.8% to 161.0 cents (+23.4% on a normalised basis)
- Cash generated from operations remained strong at R10.9bn
- Return on net assets increased to 24.0%
- Dividend of 53.0 cents per share declared
- 6,000th store opened during the period
- R60bn throughput enabled by Flash
Market-leading retail performance
Pepkor’s core retail businesses delivered consistent performance, expanding market share across key categories. Group merchandise sales increased by 8.8%, with like-for-like sales growth of 6.5%. The group’s store footprint expanded by 4.1%, surpassing the 6 000-store milestone.
Trading in South Africa benefited from the introduction of the two-pot retirement system in the first half of the financial year, while improved product availability and price execution supported performance throughout the period.
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Pep, the group’s largest brand, increased sales by 10.8% (like-for-like +9.3%) and opened 95 new stores. The brand maintained its ‘Best Price Leadership’ position, gaining market share in Babies, Kids, School, Adult, and Home categories (RLC). Pep Home continued its strong trajectory, opening 45 new stores to reach a total of 468.
Ackermans increased sales by 7.2% (like-for-like +7.1%) and ended the year with a clean stock position. The brand achieved market share gains in the Kids category during the fourth quarter and expanded into menswear, with plans to launch a beauty range in FY26.
The Speciality division increased sales by 8.3%. Tekkie Town delivered a strong recovery in the second half, while Refinery expanded its footprint. The newly launched adult womenswear brand, Ayana, was rolled out to 32 stores.
Additionally, the acquisition of Choice Clothing, implemented in June 2025, marked the group’s strategic entry into the off-price retail market, performing well in its first four months.
Lifestyle (including Rochester, Bradlows, and Incredible Connection) increased sales by 7.2%, with online sales +15%. The division continued to leverage its logistics capabilities, launching the Skooch courier business to distribute PAXI parcels, driving efficiency.
Accelerating fintech and digital inclusion
The fintech segment was a standout performer, increasing revenue by 31.1% to R16.6bn and operating profit by 52.3% to R2.2bn.
Flash, the group’s informal market platform, increased throughput by 23% to R60bn. With 170,000 active traders, Flash continues to drive financial inclusion, increasing tapped value by 37.6% to R21bn.
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In the connectivity space, Pepkor solidified its strong market position, selling 13.5 million handsets (+17%) and now accounting for eight out of every ten prepaid handsets sold in South Africa. FoneYam, the group’s cellular handset rental product, surpassed 2 million active customers, effectively lowering affordability barriers to smartphones.
The A+ retail credit book increased to 3.5 million active accounts. A record 1.3 million new accounts were added during the year, yet the group maintained a conservative credit-granting approach, with the proportion of customers able to make purchases remaining stable at 74%.
Strategic execution and future outlook
Pepkor implemented several significant strategic initiatives post-year-end to diversify its portfolio and expand its customer reach.
- Home Expansion: The acquisition of the Shoprite furniture business (OK Furniture and House & Home) addsscale in the furniture, bedding, and appliances market. The non-RSA component of this transaction was implemented on 1 October 2025.
- Adultwear Expansion: The acquisition of Legit, Swagga, and Style, implemented on 2 November 2025, adds 469 stores and significantly boosts Pepkor’s presence in the adultwear market.
- Financial Services: The group received Section 13(1) approval from the Prudential Authority to establish a banking presence in South Africa. Furthermore, the acquisition of Cloudbadger on 1 October 2025 provides a modern fintech software platform to support this ambition.
Erasmus noted that this year hasn’t been without its difficulties, but the group has continued to grow, adapt, and innovate. He says the improving economic indicators, particularly declining food inflation and more stable electricity supply, support a positive outlook.
“In the year ahead, our focus will be on integrating recent acquisitions, consolidating new retail formats, and expanding our digital and omnichannel capabilities. We plan to open between 250 and 300 new stores in FY26. With a strong operational base and clear strategic focus, Pepkor is well-positioned to continue providing easy access to everyday products and services at affordable prices,” he concludes.