Secret South African prepaid cellphone giant

Pep owner Pepkor Holdings has released its reviewed annual results for the year ended 30 September 2024, revealing that the retailer sold 11.5 million cellular handsets during the financial year.

To put this into perspective, according to market research firm GfK, Pep sells 7.5 out of every ten prepaid smartphones sold in South Africa.

“Smartphones contributed 60% to handset sales and the active SIM card base, underpinning ongoing revenue, increased to 29 million,” stated Pepkor.

It also provided an update on its newly developed cellphone rental service, FoneYam, which had surpassed one million customers by November 2024, with monthly activations exceeding 120,000 by the end of September 2024.

“The FoneYam cellular rental book amounts to R932 million (gross) with an initial provision level of 20%,” said Pepkor.

In its interim results for the six months ended 31 March 2024, the company revealed that by that date, FoneYam had accumulated 202,000 sales.

“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%.”

Therefore, between the end of March and the end of September 2024, FoneYam’s rental book grew by roughly R674 million.

Regarding Pepkor’s financial performance during the year ended 30 September 2024, revenue grew by 7.8% year over year, from R79 billion as of the end of September 2023 to R85 billion at the same time in 2024.

It also reported a profit of almost R2.1 billion for the financial year, a marked turnaround from 2023, when it reported a loss of nearly R1.3 billion.

Operating profit grew by 8.4% to R9.8 billion.

Looking ahead, the company believes it is well-positioned to capture additional market share for continued growth in the retail and fintech sectors.