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Pepkor expects FY profits to fall, shares dive

Pepkor flags full-year earnings to drop to as much as 42%, mainly due to a provision.
Pepkor said its earnings were likely to be affected after it made a provision of R500m to cover a third-party debt. Picture: Nadine Hutton, Bloomberg

Retailer Pepkor previously Steinhoff Africa Retail (Star), said on Tuesday that full-year earnings are expected to fall as much as 42% because of new shares and a provision, sending its share price down more than 11%.

The clothing and furniture retailer said earnings per share would be mainly affected by dilution from the issue of 882 million shares in 2017.

Pepkor said in May that earnings would be affected by a R500 million ($36 million) provision to cover a third-party debt acquired through using its Steinhoff International’s shares as collateral. 

An accounting scandal at Steinhoff that came to light in December last year wiped more than 90% off the company’s market value and forced it to sell assets.

Pepkor said headline earnings per share for the year to September 30 are expected to be between 77.8 cents and 91.2 cents per share, compared with 133.6 cents the previous year.

Shares in Pepkor were down 5.87% at R17.33 after initially falling more than 11%.

“If you look at what has come out, it’s not exactly stellar numbers. These things tend to get hammered on the basis of expectations,” said Ryan Woods, market trader at Independent Securities.

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Why was this information not disclosed prior to JSE listing in the Listing Prospectus? These non disclosures are in defiance of JSE regulations. Also, contravenes the Companies Act ….. criminally charge responsible person(s).

These non disclosures fall squarely on the CEO’s shoulders and he should do the right thing and remove himself from his position. Shareholders are being lied too by these material non disclosures.

Clearly, the Pepkor MO is no different to the Steinhoff MO…. belief the businesses are theirs and don’t give “two hoots” for shareholders.

The Authorities need to make an example so these “white collar crimes” end.

SICK ATTITUDE, CLEANSE THE SWOMP !!!!!

End of comments.

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