JSE-listed retailer Pepkor’s cellular handset rental option, FoneYam, has achieved remarkable success in the year ending September 2024.
Leveraging its extensive customer acquisition capabilities, Pepkor rapidly expanded its footprint in fintech. Strategic initiatives in financial services and cellular connectivity added three million customers to the group’s A+ retail credit base, including FoneYam and Abacus.
The group reported the sale of 11.5 million cellular handsets during the year, cementing its leadership in the prepaid smartphone market.
According to GfK data, Pepkor now sells 7.5 out of every 10 prepaid smartphones in South Africa, up from seven in the prior year. Smartphones accounted for 60% of total handset sales, while the group’s active SIM card base grew to 29 million, underpinning ongoing revenue growth.
FoneYam: affordable connectivity driving inclusion
The newly launched FoneYam handset rental product has surpassed one million customers as of November 2024, with monthly activations exceeding 120,000 by the end of September.
Designed to make smartphones more accessible, the FoneYam rental book reached a gross value of R932 million, with an initial provision level of 20%.
Pepkor has also made significant strides in promoting digital inclusion across South Africa. The FoneYam initiative aligns with the group’s mission to provide affordable mobile technology to underserved communities.
“This effort underscores our commitment to making mobile connectivity accessible to all – supporting economic activity, education, and health services in rural and underserved communities,” said Pieter Erasmus, chief executive officer at Pepkor.
Resilient growth amid challenges
“Our business model’s resilience is evident in these results. We continue to gain market share at improved margins in a challenging trading environment. Furthermore, our strategic focus on digital inclusion and fintech has added another powerful dimension to our traditional retail strengths, positioning us to serve our customers better while building sustainable long-term value,” Erasmus added.
The group announced a 17% increase in operating profit to R9.8 billion, with revenue growing to R85.1 billion, reflecting resilient performance across its retail and fintech segments. The company declared a 48.5 cents per share dividend in its reviewed annual results for the year ending 30 September 2024.
