JSE- and A2X-listed retailer Pepkor anticipates robust revenue growth for its FinTech division in its financial results for the year ending September 2024. Operating through its brands FLASH and Capfin, Pepkor has successfully expanded its presence in the financial services sector.
In a recent trading update, Pepkor revealed that revenue in its FinTech segment surged by 26.8% to R12.7 billion for the year to September. The company attributes this strong performance to its ability to rapidly attract new customers through its extensive retail network, enabling growth in both financial services and mobile connectivity.
Pepkor also highlighted its FLASH business, which extends into South Africa’s vibrant informal market, as a key driver of this growth.
Overall, Pepkor’s revenue increased by 7.8% to R85.1 billion, with a 9.2% rise on a comparable 52-week basis. The clothing and general merchandise segment saw revenue climb by 5.2% to R61.4 billion, while the furniture, appliances, and electronics segment recorded a 4.5% increase to R11 billion.
Despite a challenging operating environment, Pepkor’s retail operations achieved strong trading results and expanded market share across clothing, cellular, and home categories, underscoring its resilient performance in a competitive landscape.
Pepkor, a JSE-listed retailer renowned for quality clothing at discounted prices, is a big player in South Africa’s FinTech ecosystem.
FinTech is revolutionising how customer needs are met by enhancing accessibility, reducing costs, and providing personalised financial solutions. Through digital banking and online payment systems, customers can conduct transactions conveniently from anywhere, while automated services and robo-advisors offer efficient, low-cost financial management.
FinTech also promotes financial inclusion by extending microloans and mobile banking to underserved populations. Additionally, the use of data analytics allows for tailored financial products, and advanced security measures, such as blockchain and fraud detection technologies, to ensure safe transactions. These innovations collectively improve the overall customer experience, making financial services more accessible, affordable, and secure.
Pepkor’s revenue from the FinTech segment increased by 24.5% to R5.8 billion in the six months to end-March 2024, driven by strong growth in Flash and Financial services businesses.
“As a group, Pepkor has unrivalled customer acquisition capability through its retail brands and store network. This enables us to solve customer needs which go far beyond baby and school wear, such as affordable connectivity and smartphones,” Pepkor CEO Pieter Erasmus said.
“We have been deliberate in accelerating strategic execution in these areas, which weighs on profitability in the short term.”
The FinTech segment continues to increase its contribution to group revenue, contributing 13% in the current period versus 12% in the same period last year.
