Voluntary Trading Update For The Nine Months Ended 30 June 2021

PEPKOR HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: PPH
Debt Code: PPHI
ISIN: ZAE000247995
(“Pepkor” or the “group”)

VOLUNTARY TRADING UPDATE FOR THE NINE MONTHS ENDED 30 JUNE 2021

Continuing operations

Group revenue for the nine months ended 30 June 2021 (“nine-month period”) increased by
13.9% to R53.9 billion. This includes revenue growth of 8.1% reported for the six months ended
31 March 2021 and revenue growth of 27.9% for the three months ended 30 June 2021 (“third
quarter”). Trading during the third quarter was volatile with moderate trading in April 2021, strong
trading in May 2021 followed by subdued trading in June 2021.

Performance during the third quarter compares to the corresponding third quarter ended 30 June
2020 which was affected by varying degrees of store closures due to COVID-19 lockdowns. The
group was also not able to trade on its full product range in certain retail brands until June 2020.
In addition, very strong trading was reported once stores reopened due to pent-up consumer
demand.

Clothing and general merchandise

Segmental revenue for the nine-month period increased by 14.0% and by 28.7% for the third
quarter.

Pep and Ackermans continued to grow market share on a 12-month rolling period according to
the latest Retailers’ Liaison Committee (RLC) data, albeit at a slower rate which was expected
following the high base and significant market share gains achieved since May 2020. Retail space
expanded by 3.2% year-on-year with 56 new store openings during the third quarter.

Pep and Ackermans                                       Three months          Nine months
                                                        ended                 ended
                                                        30 June 2021          30 June 2021

Sales growth                                            31.8%                 15.5%

Like-for-like sales growth based on corresponding       29.0%                 13.3%
2020 period

Like-for-like sales growth for the third quarter based on the corresponding third quarter ended
30 June 2019 was 10.3%.

Pep Africa performed well in constant currency terms as sales increased by 14.0% and like-for-
like sales increased by 16.5% for the nine-month period. Sales in South African Rand (“ZAR”)
terms declined by 9.9% for the nine-month period due to the weakening local currencies and the
strength of the Rand.

The Speciality business continued to benefit from strong consumer demand for casualwear and
branded footwear in the value market segment.

Speciality                                              Three months           Nine months
                                                        ended                  ended
                                                        30 June 2021           30 June 2021

Sales growth (excluding John Craig)                     36.3%                  21.5%

Like-for-like sales growth based on corresponding       32.1%                  18.1%
2020 period

Like-for-like sales growth for the third quarter based on the corresponding third quarter ended
30 June 2019 was 12.2%.

Collections on the Tenacity credit book, which facilitates credit sales in Ackermans and Speciality,
were satisfactory and remained at similar levels to those before the onset of COVID-19.

Furniture, appliances and electronics

Segmental revenue for the nine-month period increased by 22.1% and by 50.5% for the third
quarter.

Trading in the JD Group continued to benefit from strong consumer demand for household goods
and consumer electronics. Sales were driven by strong growth in cash and lay-by sales while
continued prudent credit granting resulted in a lower total credit sales mix of 9.7% for the nine-
month period versus 14.0% in the comparable nine-month period ended 30 June 2020.

Collections on the Connect credit book, which facilitates credit sales in JD Group, were
satisfactory and remained at similar levels to those before the onset of COVID-19


JD Group                                                Three months           Nine months
                                                            ended                  ended
                                                         30 June 2021           30 June 2021

Sales growth                                                61.2%                  27.1%

Like-for-like sales growth based on corresponding           64.8%                  29.3%
2020 period

Like-for-like sales growth for the third quarter based on the corresponding third quarter ended
30 June 2019 was 22.4%.

Fintech

The Fintech segment reported revenue growth of 4.3% for the nine-month period and 7.0% for
the third quarter.

Revenue growth momentum in Flash continued at double digits, while reduced credit granting
and lower interest rates resulted in a decline in revenue generated by the Capfin business.
Collections in Capfin were satisfactory and remained at pre-COVID-19 levels.

Discontinued operations - Building materials

The Building Company continued to benefit from a positive sales trajectory in the building
materials market.

The Building Company                                  Three months          Nine months
                                                      ended                 ended
                                                      30 June 2021          30 June 2021

Sales growth                                          80.0%                 25.9%

Like-for-like sales growth based on corresponding     95.2%                 29.9%
2020 period

Like-for-like sales growth for the third quarter based on the corresponding third quarter ended
30 June 2019 was 9.2%.

The Competition Tribunal will consider the transaction to dispose of The Building Company
following the Competition Commission’s recommendation on 28 May 2021 to prohibit the
transaction. The timing of the Competition Tribunal hearing has not been confirmed.

Refinance of R2.5 billion term loan funding completed

On 30 June 2021 the group completed the refinancing of R2.5 billion in term loan funding (“Term
Loan C”). Term Loan C carried interest at three-month JIBAR plus 225 basis points and was
repayable in May 2022 (as disclosed in the group’s 2020 annual financial statements). Term Loan
C was replaced by three term loans repayable from 2024 to 2026 at substantially lower rates
ranging between three-month JIBAR plus 159 to 174 basis points. This further strengthens the
group’s liquidity, debt repayment profile and reduces the group’s cost of funding.

Outlook

As reported by the group on 16 July 2021 on SENS, the civil unrest which erupted during July
2021 in the KwaZulu-Natal and Gauteng provinces of South Africa (“the affected areas”) impacted
Pepkor’s operations and the livelihoods of its people.

After a thorough assessment, a total of 529 stores across the group were impacted in the affected
areas. Stores were burnt, looted or damaged to varying degrees. This represents approximately
10% of the group’s total retail store base. In addition one of the JD Group’s distribution centres in
Cato Ridge, KwaZulu-Natal was looted. Trading was disrupted, with a number of stores
intermittently closed in the affected areas as a precautionary measure to ensure the safety of
employees and customers. In addition, the group’s supply chain and distribution operations were
severely disrupted in the affected areas as the group took swift action to deploy extensive tactical
measures to protect and safeguard its infrastructure.

Recovery plans have been formulated and implementation has commenced. The pace at which
stores will be reopened is dependent on factors such as access to materials and equipment for
store refitment purposes and the ability of property owners to restore premises which suffered
extensive damage. All distribution operations have recommenced from Monday 19 July 2021 and
plans were put in place to service JD Group stores in the affected areas through its other
distribution centres. Merchandise teams are working with their long-standing and geographically
diversified supplier bases to address any potential impact of stock shortages.

As previously reported, the group has the necessary insurance cover in place to mitigate losses
incurred for damage to assets, stock losses and business interruption. The process to quantify
damages and initiate claims has started. Additional costs have been incurred to secure and
safeguard assets and infrastructure. While these costs may not be fully recoverable, it is not
expected to have a material impact from a group perspective.

The group continues to expect a constrained retail environment going forward as a result of the
longer term impact of COVID-19 on the South African economy, further exacerbated by the recent
civil unrest. The group’s unparalleled position in the discount and value retail market segments
continues to be increasingly relevant in addressing consumer needs.

The leadership and operational teams of Pepkor have again shown incredible agility and
resilience in dealing with this latest crisis. Pepkor will remain true to its purpose to make a positive
difference in the lives of our customers and the communities in which we operate by providing
convenient access to everyday products and services at affordable prices.

Pro forma constant currency disclosure

The group discloses unaudited constant currency information to indicate Pep Africa’s
performance in terms of sales growth, excluding the effect of foreign currency fluctuations. To
present this information, the nine-month period turnover for Pep Africa reported in currencies
other than ZAR are converted from local currency actuals into ZAR at the prior nine-month
period's actual average exchange rates. The table below sets out the percentage change in sales,
based on the actual results for the nine-month period, in reported currency and constant currency
for the basket of currencies in which Pep Africa operates.
% change in sales compared to the prior nine-month           Reported           Constant
period                                                       currency           currency

Pep Africa                                                   (9.9%)             14.0%

The information included in this announcement is the responsibility of the directors, does not
constitute a group earnings forecast and has not been reviewed or reported on by the group’s
external auditors. The constant currency information has been prepared for illustrative purposes
only.

Parow
23 July 2021

Equity sponsor
PSG Capital

Debt sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 23-07-2021 10:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.