PEP coining it on smartphone rentals

Pepkor’s cellular business showed solid growth during the six months ended 31 March 2024, with revenue generated from cellular sales growing 8.8% to R1 billion.

The company also launched a new smartphone rental product — FoneYam — which had accumulated 202,000 sales by the end of March 2024.

“FoneYam, the newly developed cellular handset rental product designed to make smartphones affordable for customers, was rolled out to 1,000 stores by the end of March 2024,” said Pepkor.

“The FoneYam cellular rental book amounts to R258 million (gross) with an initial provision level of 16%.”

It added that four million cellphones were sold during the six months through Pep Cellular, 50% of which were smartphones.

The company also owns Ackermans, which sold 1.3 million handsets during the period, 80% of which were smartphones.

“The group sells seven out of 10 prepaid smartphones in South Africa, and 5.6 million cellular handsets were sold during the period, 58% of which were smartphones,” said Pepkor.

“Private label cellular handsets such as Stylo and Premio contribute 18% to the product mix and achieve higher gross profit margins.”

Looking at the company as a whole, Pepkor reported revenue growth of 9.5%, from R39.5 billion to R43.3 billion.

However, its net profit for the period dropped by approximately 21.5% year-on-year.

Pepkor reported a net profit of R3.50 billion for the six months ended March 2023, which dropped to R2.75 billion for the six months ended March 2024.