Retail giant Pepkor is rapidly expanding beyond its traditional discount retail roots, with its smartphone rental and fintech operations emerging as key growth drivers.
Through its device rental offering, the group is tapping into rising demand for affordable access to smartphones among cash-strapped consumers.
The company has also significantly scaled up its fintech business, which now spans digital payments, lending, insurance and financial services aimed at underserved consumers.
Building on this momentum, the company is preparing to launch a digital bank, positioning itself to compete more aggressively in South Africa’s evolving financial services landscape and to unlock new revenue streams through its vast customer base and retail footprint.
This emerged yesterday when the JSE-listed Pepkor Holdings reported a 13.2% increase in group revenue to R54.8 billion and 12.1% growth in normalised headline earnings per share (HEPS) for the six months ended 31 March, delivered off a strong prior-year base that increased by 19.2%.
Operating profit grew by 9.4% to R6.3 billion, while the group continued to expand its retail footprint, scale its financial services capabilities, and integrate strategic acquisitions.
In a statement, Pepkor says trading momentum strengthened through the period, with retail platform sales growth accelerating from 10.6% in the first quarter to 12% in the second quarter.
According to the company, this supported further market share gains, expanded customer reach across physical and digital channels, and strong growth across the financial services and informal market platform segments.
Extending reach
Pieter Erasmus, chief executive officer of Pepkor, says: “These results reflect the strength of our business model and the disciplined execution of our strategy. We continue to expand our scalable, retail-powered consumer platform, extending our reach through financial services and the informal market − serving customer needs from babywear to banking.
“Growing normalised HEPS by 12.1% off a high base, and by 15.6% on a two-year CAGR basis, demonstrates the execution capability of Pepkor.”
PEP increased sales by 6.3%, with like-for-like growth of 4.3%, and expanded market share in the babies, kids, adult and home divisions.
The brand added 38 new stores, reaching a footprint of 2 725, while PEP Home reached 483 stores and successfully launched online in October 2025.
The retailer notes that PEP sold 4.9 million handsets during the period and activated 750 000 FoneYam accounts, representing a 42% increase.
It adds that PEP Home was launched online, followed by schoolwear, and 30 000 online orders were completed during the period.
Pepkor’s financial services segment delivered standout growth, with revenue up 41.6% to R3 billion and operating profit up 63.4% to R691 million.
According to the retailer, FoneYam activated 1.3 million cellular rental accounts during the period (+32%), taking the active base to 2.4 million.
“Customer take-up of a second FoneYam rental after completing the first has exceeded expectations, effectively extending customer lifetime value,” it notes.
Banking ambitions
The group received regulatory approval (subject to conditions) from the Prudential Authority under section 13(1) of the Banks Act to establish a bank in South Africa, and has subsequently completed its section 16 application.
CloudBadger Technologies, a South Africa-based financial services platform and team, was acquired effective 1 October 2025 to support the group’s banking ambitions through PlusB, says Pepkor.
It adds that the informal market platform segment, anchored by Flash, increased throughput by 20.3% to R34.7 billion.
Flash is Pepkor’s fintech and digital services platform that enables informal and underserved consumers to access financial and digital products through a network of retail stores and independent traders across South Africa. Originally launched as a prepaid airtime and electricity vending business, Flash has evolved into one of the group’s fastest-growing fintech operations.
Flash ended the period with 176 000 active traders and 79 000 acquiring devices in the trader division, driving a 28% increase in tapped value. Aggregation throughput grew by 59%, while voucher redemptions in the consumer division grew by 31% to 232 million.
Share
