Okay, welcome to the 2022 Pepkor Annual Results. My name is Pieter Erasmus. I'll be representing the team here in the overview of the results. Riaan, who most of you will know, will analyze the financials. Sean Cardinaal, who's joining us today as well as the newly appointed Chief Operating Officer, will go through the detail, and then we will answer your questions. Get ready to prepare them and we'll answer them at the end of the presentation. Just a bit of background about Pepkor. The Pepkor today consists of mostly PEP and Ackermans in the formal retail side, and a whole lot of other businesses that we've added. Started very early, in 1901, and Sean and myself joined not long after that, 1998 and 2001.
We have a history with the group. We spent a lot of time in these businesses, and us coming back to the group was obviously beneficial because we've been around the group for a while. The agenda today, we're gonna have a overview of the results. Riaan, as I said, will do the financial performance. We'll look at the business performance, and finally I'll come back and look at the outlook and how things are going at the moment. The highlights for this year. There's a bit of noise in the HEPS or earnings. Up 20%, which is a great performance, but if you take out some of the noise, which Riaan will explain to you, it's up 15.7%.
The revenue growth is 5.3%, but there's some adjustments that need to be made for the Flash calibration of the turnover. We're reporting it differently now. There were some floods in KwaZulu-Natal that impacted the way that PEP's turnover was reported this year. There's some market share gains that I'll speak briefly about. I've got a slide about that. Cash generation was very good. Operating profit, good growth of 11%. We've recovered most, if not all the insurance claims from the social unrest. Lastly, very importantly, we included in the FTSE Responsible Investing Index this year. Again, Pepkor at a glance. 342 million physical transactions, of which 12 million cell phones are sold. 1.6 billion virtual transactions.
We are now operating in 11 countries, of which 10 is in Africa, Brazil being added, so it's a new continent for us this year. Total of 5,830 stores, still continuing a strong store opening program of 319 stores this year. We also have a big presence in the informal market. Over 202,000 traders that is we've got a relationship with and trade our products out in the informal sector. We have got almost 50,000 employees, which does a very sterling job, and continue to serve our customers daily. Just a bit of a reflection on the last five years of Pepkor's share price. You'll see us there compared to the rest of the market.
Up marginally, where general retail is down, all share index is up. That's obviously the challenge for us in order to attract capital, is to get that share price at a higher rating and get the price up so that we can execute on our plans. I said earlier that I'll make a brief point about the market share. Because of COVID and some of the other factors, the market shares in South Africa are quite difficult to calculate, but we're very pleased to announce that Pepkor, over the last couple of years, have gained 142 basis points in the clothing, footwear, and homeware market sector, which shows that our model is robust and that we continue to grow in our customer base. Riaan will now take you through more of the detailed financial performance and, I'll join you a bit later. Thanks.
Thanks, Pieter. As Pieter said, I'm gonna take you through the detailed numbers for the past financial year. We start off just again with some of the key highlights and key KPIs for the year that's passed. To start off again with the revenue growth, showing a growth of 5.3%. This number was impacted by quite a few factors during the last year. We've had, again, an increase in load shedding during the year. We've had the social unrest of the previous year, which still impacted this year, and we also had the grants that was not paid out during certain years. However, there's two factors specifically that had a big impact on us. The one was, as Pieter mentioned, the change in the product mix for Flash, which resulted in a negative growth in the Flash business.
If you take that out, and also then we had the impact of the floods during the year, we estimate we've lost ZAR 460 million. If you take those two factors out, our revenue growth goes up to 8.1% versus the reported 5.3. We're all fortunate to say that our gross profit increased this year by 110 basis points. We normally would have a gross profit about 34.5%-34.7%. This year it went up to 35.4%, mostly driven by an improvement in financial services, with the books growing, the increase in interest rates, and more customers on the books resulted in more fees in that environment. Also, we've had the addition of Avenida, which shows a higher gross profit.
Also, as I mentioned, a change in product mix in Flash resulted that there's a higher gross profit percentage in the Flash side. This all translates into an operating growth of 11%. If you take that to above the ZAR 10.3 billion that we've delivered this year, I'll back that a bit further later on. Headline earnings per share growth of 20.1% overall, taking us up to ZAR 1.62 for this year. Again, very pleased to report that we were able to generate cash of more than ZAR 11 billion during this year, which is still a very commendable 75% cash conversion rate.
One of the key highlights for us this year is that we are again consistently able to deliver a return on net assets of above 30%, again delivering 35%, which for us is really again proving that on capital that we do invest, we get a very good return on our investment. This all translates into a dividend per share of ZAR 0.552 that we've declared, which is a 25% growth on last year, or it's still maintaining our three times earnings cover as we've communicated during the year. Headline earnings per share, as I mentioned, we ended up ZAR 1.626, which exceeded general market consensus, which was reported ZAR 1.52. Very pleasing that we were again able to exceed market expectations.
If you take off the one... take out the once-off item due to the Steinhoff global settlement, that drops to ZAR 1.507 versus consensus of ZAR 1.40. Two major items from an insurance perspective that impacts this result this year compared to the previous year. The first one obviously already happened in the previous financial year that we already commented on, the social unrest that happened in July last year, which impacted 550 of our stores. Last year already on the Sasria side, we received an interim payment of ZAR 500 million. This year we received a further ZAR 536 million, bringing the total amount to just over ZAR 1 billion. Similarly, on the business interruption side, last year we re-received already ZAR 171 interim payment.
This year we received a further ZAR 339 million, bringing the total amount received from insurance to ZAR 510 million. This ZAR 510 million is obviously very important to us, 'cause this compensates for the loss in revenue that we've lost the top line but still protected our bottom line, that we still delivered a very good result during the year. Overall, very pleased that this chapter is now put behind us from insurance, and that we've collected more than ZAR 1.5 billion in insurance to make sure that our results was not severely impacted by the social unrest last year. If we look then at the second part, we also had the floods, as we reported during the six months, during April of this year, which really impacted the PEP business.
We anticipate our total overall loss at this stage to be ZAR 800 million. We're also fortunate to have already received an interim payment of ZAR 396 million during this year, specifically being able to recover the stock and some of the expenses we had to incur during this period. We do obviously anticipate that the rest of the amount we should receive in that next financial year. Just to confirm, if you take some of these once-off items into account, what the impact of that was on our HEPS growth. You'll see our overall growth was 20.1%. If you take out the impact of the Steinhoff property acquisition last year, we're at a ZAR 265 million impact as I reported last year. That reduces the HEPS for last year to ZAR 1.30.
This year we had the impact of the Steinhoff global settlement, which means there's recovery of ZAR 439 million for that, taking this year's normalized HEPS growth to ZAR 1.50, which means a normalized HEPS growth for this year is still a very commendable 15.7% versus the statutory reported number of 20%. As I said, some of the revenue drivers, again, to confirm that last year we had now ZAR 77 billion, the 5.3% growth up to the ZAR 81 billion. Yes, there is some new acquisitions with Avenida. If you remove Avenida and John Craig that was in the previous year, their growth goes down to 3%.
As I mentioned earlier, that change in product mix from Flash means that 5.3%, if you eliminate the impact of the Flash out of the revenue growth number, increases from 5.3% to 7.5%. If you take the impact of the lost revenue and sales because of the flooding in KZN, where we lost an anticipated ZAR 460 million, that number increases to 8.1%. Still very happy to report that our cash sales grew by 5.7% during the year, so we're still seeing a good growth in cash. Obviously, the overall credit number is much higher, 25.2%, because of the addition of Avenida, which wasn't in the base last year, which has got a higher credit percentage than most of our other businesses.
If you eliminate the impact of Avenida, our credit sales grew by 8.8%, which is much more in line with our cash growth. Overall, our cash sales are still 92%, which again shows that we are still very much a cash business, but we do obviously offer the convenience of credit sales in some of our brands. If you look at the segmental reporting, the clothing and general merchandise grew by 8.8%, mostly driven, as I said, by Avenida, Speciality, and also PEP Africa, which showed good results this year. Unfortunately, PEP and Ackermans had lower performance this year, but still showed very good positive growth during the year. Furniture showed good growth, specifically on the tech side, with Incredible Connection and HiFi Corp doing very well, helping us insisting that 6% growth. Building materials, very difficult year this year.
Still, compared to some of our competitors, very happy to report that we did show a small positive growth. As I mentioned, the Fintech segment really impacted by the change in product mix on the Flash side, which showed a negative revenue growth of close to 14%. However, Capfin did show a positive growth on their side, resulting in the overall decrease in revenue of 11% in the Fintech segment. Overall, we saw a slight increase in the revenue mix between the different segments, with clothing and general merchandise increasing by 1% to 66% compared to last year. Again, as I reported during the six-month results, we're still very pleased that we do show consistent growth on the revenue side year in, year out.
With the exception really of 2020 with COVID, you'll see very good steady revenue growth every year and a five-year compounded growth rate of 7.1%. Gross profit improvement, as I mentioned earlier, 34.6% is more the average. As I communicated always in the past, that we normally run at the impact of financial services, obviously resulting in that ZAR 1.10. However, our forward view is again that next year we should return to a much normalized 34.7% or 34.8%. However, it does show that from a consistency, we are always very consistent year in and year out, and we don't have big jumps in our gross profit percentage from the one year to the next. Other income, very much impacted by the insurance amounts, as I already explained earlier.
If you take out the impact of that insurance amount of ZAR 510 million received during the year, the growth is 6.5%. Most of that is really driven by increase in bill payments in our stores, where we still do see an increase in bill payments compared to the previous year. We're hoping that's all gonna continue going forward. As we've always said in the past, we like to keep our cost of doing business as low as possible, and the teams are really fanatical about managing their costs. Although our cost of doing business increased from 24%-25%, that was mostly driven by the lower growth in top line, not because of good expense management. As you can see, our operating profit expenses or operating expenses grew by 9.4%.
If you exclude the impact of Avenida costs, which wasn't in the base last year, and once off acquisition costs around that, the growth reduces to only 3.7%. Within that, again, some of the key indicators. Our property costs grew only by 6.5%, and that includes, again, Avenida. You have to eliminate it, which then means it's closer to a 5%. Salary costs, including the 220 new stores, and Avenida only grew by 7.9%. Again, you have to take some of that out, which means your salary costs only grew by inflation or even lower. On the depreciation side, that did grow by 30%, and that's mainly due to the additional investment CapEx that we made this year.
Overall, very good expense management again this year from the different operating divisions. Operating profit, you see earlier, I showed that obviously our operating profit increased by 11% from the ZAR 9.3 billion last year to ZAR 10.3 billion this year. The same once-off items have to be excluded. Last year, the property acquisition from Steinhoff of ZAR 265, and this year, the Steinhoff recovery, which means that your normalized operating profit is 9.4%. We unpack a little bit, where is that coming from? Firstly, our star performance this year was really the furniture segment with very good profit growth.
You saw the top line growth, they were really able to really manage their expenses very well and also made sure that where they had unprofitable stores or either closed it down or relocating it, means that there's very good 51% growth in that segment, followed by The Building Company. Similar, very good expense growth, keeping the growth very low, also saw a small improvement in the gross profit percentage, meaning that they could grow by 24.5%. On the Fintech side, although as I said earlier, their revenue growth was a negative growth, their profit is growing still at 13.8%, mostly driven by Flash, which had a profit growth of close to 20%, Capfin also still contributing a very good positive profit growth.
Although the revenue mix has changed for Flash, it has resulted in a much higher profitable product. On the clothing and general merchandise side, similar picture that we saw on the revenue, good growth from Africa and speciality, with unfortunately lower growth, specifically from Ackermans and to a lesser extent, PEP, during this financial year. Operating prof, similar to revenue. We believe that we did deliver consistent results year in, year out. We always wanna deliver at least an operating profit growth of above 10%. Again, barring the exception of the COVID year in 2020, we've been able to do that.
As I reported last year in 2021, even on excluding IFRS 16 basis, we are able to significantly exceed 2019 profit, again resulting in a consistent growth year in, year out, and we've returned to almost full profitability with an EBIT margin of 12%, which is really our target percentage. Finance cost, even with higher interest rates and an increase in our debt, the bank debt did increase by close to 25% on last year. However, our overall finance cost only increased by 7.1%, that's mostly driven due to the lower growth in finance cost on the IFRS 16 component, which only grew by 1.2% because of better renewal on leases, and reduction on rentals that we again achieved this year. Overall, only 7.1% growth.
We've seen a sharp improvement, as was really communicated during six months result, in an effective tax rate, dropping from last year's 31% to 26.2%, again driven by two factors. The one is the Steinhoff settlement. That ZAR 439 is a non-taxable item. Then also with the change in the corporate tax rate from February next year to 27%, we already revalued our deferred tax liability, deferred tax asset, that resulted in a benefit to our statutory tax rate dropping down to the 26.2%. Long term, we do see that will increase again to between 27% and 28% from effective tax rate, still very good compared to previous years. We did see a significant increase in inventory number this year compared to last year.
As I've communicated last year, we did end up very low in 2020 and 2021 on inventory because of various reasons, either good sales or stock received after year-end. This year, we made very sure that we received enough inventory for the Christmas trade. As you can see from the big increase in goods in transit, up by 26% compared to last year. We've also generally got more freshness in the business in most of our operating company. That number is again also impacted by the high inflation that we're seeing now in summer flowing into the business and then also the number of new stores. You also have to exclude Avenida. If you take Avenida out of that growth number, that growth number drops to 25%.
Overall, very happy that we've got enough stock and the age of the stock is still very appropriate going forward. From a credit book perspective, we've seen growth in all our credit books. As we've communicated previously, we have held back in previous years on credit growth. This year, we've seen a growth across all our books. However, it's still at a very conservative rate. We're very prudent still in credit granting. As you can see from our collection, still looking very good. Generally, non-performing loans across all three of our books. South African books still looking very good, with Tenacity actually decreasing.
Capfin staying more or less at the same level, and the Connect book also dropping from a 24% to a 19%, which means that all our provisions could either stay at the same level or come down. With the addition of Avenida also running at more or less a Tenacity rate, 24% with a 16% non-performing loan, very comfortable with the level of provisioning we've got for all the businesses. Even with a possible further increase in interest rates or the current increase in interest rates we've already seen, we're comfortable we are more than adequately provided to cover any of those eventualities in the next couple of months. That results really in your bad debts or bad debt write-offs or debtors cost.
Although we had a 38.2% increase in debtors cost this year, you really need to understand and unpack a bit of the background. If you look at pure bad debts written off, it's actually been a decrease. Last year was ZAR 1.1 billion. This year's ZAR 990 million. In there is also Avenida number. If you exclude the Avenida bad debt written off, that's actually a decrease of 25% in bad debts. However, what happened last year is we had the reversal of the provision that was created in 2020, so that's ZAR 360. That was why the debtors cost ended up ZAR 795. This year, we didn't have that reversal, but as I mentioned earlier, all the books did grow.
In line with the growth of all those books, we had to increase our provisions across all those books, resulting in an increase in ZAR 95 million in the provision. Very comfortable with bad debts written off and debtors' cost is at acceptable level, as was communicated last year already. Cash generate, as I said, ZAR 11.2 billion. Very pleased that we had a very good year with a 75% cash conversion. That was mostly impacted by the increase in inventory, as I showed you, where we invested ZAR 5 billion more in inventory. If it wasn't for that, the cash conversion would have been higher, but we feel that is the right investment for this year, and specifically with us going into November and December trade, very comfortable with that number. Net debt to EBITDA or net debt target.
It did increase net debt levels overall from ZAR 5 billion- ZAR 7 billion this year, mainly driven by the ZAR 2.8 billion investment in Avenida for the acquisition. Overall, we are still within our target range of 0.5-1x net debt to EBITDA at 0.7. Very comfortable with the current level of debt, and we'll obviously still, going forward, again, manage that debt level down with the higher interest rate currently being paid on that. Also comfortable with our debt repayment profile. We did do refinancing, again, of ZAR 5 billion of our debt during the year at much better interest rates, so we've got a very good even debt repayment profile over the next couple of years. Capital expenditure. We did cut back on CapEx spend during 2020 and 2019 with uncertainty around COVID.
We're now back to more normalized CapEx levels of spend and back to opening more than 300 stores a year. The normal CapEx spend was ZAR 1.9 billion for this year. We do still have the investment in the PEP Hammersdale DC for the building that we're building, which is ZAR 500 million. That DC is now nearing completion, it should be commissioned during the new financial year. There'll still be a bit of CapEx spend in the new financial year, but the majority has already been spent on that.
Our CapEx for this year as was guided during the year is 2.4% of revenue, and the majority of that still goes into the opening of new stores or investment into new stores, which we still think where we see the majority of our growth coming from going forward. On the investment of CapEx, as I mentioned earlier, we've always communicated in the past that it's very difficult to look at our return on equity because of the size of the goodwill and intangibles on the balance sheet of ZAR 57 billion. However, even with that included, you'll see that our return on equity did improve from 2017 to 9, from 6.8% to almost 10%.
As I mentioned earlier, we prefer to look at return on net assets, which excludes the impact of the goodwill intangibles, and that you'll see the last year is above 30%. It's currently at 35.1%, again, showing that we get a very good return on our investment on CapEx invested. Finally, to look at capital allocation. As I just mentioned, we know we get a good, very good return on our investment in new stores or infrastructure, we'll continue to always be our first priority to build in additional infrastructure, invest in new stores, because we get a very good return on that. We did invest this year in the acquisition of Avenida. Its acquisition price was ZAR 1.8, plus working capital invested of another ZAR 1 billion.
We'll continue to look at other opportunities in the market where we do think there's a natural fit with us or an opportunity for us to grow from a synergy perspective. We did do share buybacks, as I communicated in the six-month results. The main purpose of our share buyback is again to not dilute shareholders with the issuing of share options for employees and grant options, we'll continue to look at what opportunity is to do share buybacks. The fortunate thing, the share buybacks we did during the year, we did at a very good price of ZAR 19.99, so already getting a return on that investment made.
As I communicated earlier, we were very happy to maintain our dividend cover this year, three times earning resulted in ZAR 0.552 per share or a 25% increase on last year. On that point, thank you for your time. I'll hand over to Sean now to take you through the individual business unit performance. Thank you.
Thank you, Riaan. Good morning, everybody. My name's Sean Cardinaal, and it's my job to take you through the business unit performance details. What we've tried to do is give you some common numbers across all of the business units, so you can compare areas such as sales, like-for-like, market share, and expansion, and then give you an update on some of the more strategic items in each business unit. It's not my intention to go through every detail on every slide, but to call out the most pertinent points. Before we start, I think it's worth saying that we think about our business in three different clusters. The first cluster being traditional retail. That's where the bricks-and-mortar customer-facing retail brands sit, even though they have their own online propositions in some cases.
The second area is the Fintech area of the business, and that's where we house our consumer-facing financial services products. The final area of our business is really where we leverage group scale and efficiencies. I'll go through it in this particular format. If we move into traditional retail and start with the PEP business, I think it's worth talking about some of the macro factors that affected PEP during the year. As Riaan alluded to, there are quite a few of these. Firstly, the looting stores. There were 283 stores that were looted when the event actually occurred. 94 of those stores were still affected in the last financial year.
The floods in KZN impacted not only the stores there, but more importantly, the distribution center, which caters for 40% of the total supply chain of PEP, during the course of last year. The third area was the social grant disruption. In quarter three, there was disruption to payment to customers and the PEP customers severely impacted by that. Of course, load shedding, where whilst PEP has the ability to trade in 100% of its stores, the reality is the consumer behavior and the customer reaction to load shedding was certainly felt in quarter four. What happened? All of that translated into a sales growth of 5%, 6.8% if you exclude the impact of flooding.
If you look at the specific departments, footwear, adult wear, essentials, and homeware, particularly strong performance. In terms of like for like, we saw 2.7% like for like sales growth, interestingly, both transactional growth and average basket spend, which is a positive indicator for us. If you look at a three-year CAGR, an average growth of 2.4% per year, which for a business of PEP's maturity and market positioning is a credible performance. They opened 134 new stores last year. As you can see on the slide, 61 of those being in the homeware area, so making significant advances in home, resulting in a 22% growth in the home category during the course of last year.
We then look at market share, and to try and remove the noise of COVID, et cetera, we look at market share pre-COVID to post-COVID, and PEP over this period has gained 37 basis points of market share. Again, a very credible performance given the level of competition in this end of the market. Best price leadership, the PEP business is built on best price leadership. What the 96% BPL measure tells you is that in 96% of the cases that were measured, PEP had the cheapest price in the market. What's particularly encouraging is that this was done in a market with high inflation and without doing any specific damage to operating margins.
In terms of the cellular business, 8 million of the 11.7 million phones that we sold in Pepkor were sold through PEP, 55% of these being smartphones. We see a shift into the smartphone market every year. If we move on to the Ackermans business, Ackermans is impacted by exactly the same factors as PEP, although from a load shedding perspective, only 70% of the Ackermans stores are able to trade during load shedding, and of those, only 50% of those are actually manual trade stores. They are more impacted by load shedding than PEP is. The result of that was a fairly low 2.8% sales growth.
If you look at a like for like perspective, that's 1.1%, driven mainly by average basket spend, with flat transactional growth. What's more important to look at in terms of Ackermans is the base that they come from. On a three-year CAGR basis, 6.5% per annum growth in terms of like for likes. I think the business will be the first to admit that there were some internal issues that impacted on sales, particularly around the assortment decisions for summer 2022. These related to some pricing issues. They related to the basics versus fashionability mix, particularly in boys wear and in women's wear, and some specific fashionability calls within women's wear. The team have reacted quickly. They've repriced product to address this and made the necessary changes for winter next year.
We're confident that we'll see a turnaround in that performance pretty quickly. In terms of new store openings, they opened 77 new stores. 12 of those were women's wear stores, so the Ackermans standalone women's format, and 28 of them were the Ackermans Connect stores. We have nearly 40 stores that are standalone cellular stores under the brand of Ackermans Connect, and these performed very well last year. Over the three-year period, 80 basis points increase in market share, particularly in areas such as baby and essentials, which is very encouraging. The last thing to note is whilst click and collect is less than 1% of the sales, what was very interesting is that 60% of the click and collect orders were collected from smaller stores.
The strategy behind launching Click and Collect was always to give a customer in a small store the same choice as a customer shopping in a, in a big store or a big shopping mall. Those numbers would indicate that that strategy is playing out just in that regard. If we move to PEP Africa, again, worth noting that some years back, PEP Africa was identified as a big growth story for the group. We are now much more in a consolidation phase, and despite that, the business unit performed very, very well. 4.3% growth at constant currency, driven specifically by good sales growth in Nigeria and Malawi, less so in Angola and Zambia.
Zambia came off a very high base in F '21, and Angola impacted by some quite severe COVID restrictions in terms of customer movement in the earlier part of the financial year. Like for likewise, 5.8% like for like in constant currency and a 2.3% CAGR over the three-year period. Four stores closed, the mandate has been not to open stores, but to utilize our existing footprint and drive efficiencies. Really what's very pleasing is to see continued improvement in terms of the repatriation of profits out of those markets, and some quite resourceful creativity from the marketing teams. We have now 350,000 customers on an email base, every single store has approximately 2,000 customers in WhatsApp communications that are used to send various promotions to these customers.
Quite ingenious work from the PEP Africa team. If we move to Speciality, this business is interesting. It contains probably three different types of business. We have what we would call mature businesses in Dunns and Shoe City that are at scale and have been around for quite some time. We have what we would call semi-mature business, so business such as Refinery, which has close to 100 shops. The new businesses, which is basically CODE and S.P.C.C. You can see that combined, this division delivered very, very good growth at 10.3%, driven very much by transaction growth and a little bit of ATV spend.
On a like for like basis, very strong performance at 9% and a nearly 7% three-year CAGR, driven by businesses such as Refinery, Shoe City, Dunns and Code. Opened 48 new stores, 28 net stores. There were 20 closures, and most of those in the Code format and in the Refinery format. Market share-wise grew by 26 basis points versus three years ago. Again, these propositions are resonating with the customer. Albeit some of these brands are small, they are taking market share, which is encouraging for us. A 90.4% increase in online sales growth, which again shows us that the specific customer in speciality is far more attuned to online retail. Some of the new brands such as Code and S.P.C.C. are giving us capabilities in that area.
The focus really going forward is around opening up new markets and new concepts. These are intertwined. To give you an example, Refinery, we've opened some stores outside of major metropolitan areas, and these have proven to be very successful. That shows us that there is scope for footprint expansion within Refinery. Avenida, the Brazil business, I think as Riaan mentioned, we took control of the business in February 2022. We built a Value Creation Plan with the management team, that was basically built around four areas. One was driving existing store performance and trading densities. The second one was recapitalizing the business, injecting stock. The third one was around the proposition, so repositioning the business as a discount retailer. Finally, the fourth piece was around leveraging the scale of the group and driving footprint expansion.
As you can see from the numbers, a very, very credible 37.5% total sales growth last year at constant currency and nearly 36% like for like, driven very much by the injection of working capital and stock. In the existing stores, more than 30% improvement in the sales per square meter, very encouraging for us. five new stores opened during the year. All of those stores opened utilizing the PEP Core methodology and evaluation models. All of the stores approved through that are trading well above the evaluation metrics, which we're very encouraged about. The focus going forward is to continue to leverage PEP Core.
We've placed nearly 100,000 units of orders on the back of PEP for next winter, and we'll be utilizing the Disney contract that we have within the PEP business to create major disruption in the Brazilian market with character merchandise. Of course, we will look to accelerate new store openings as much as possible in the coming years. If we move across into the JD Group. The JD Group, 5.4% sales growth, driven predominantly by the tech area, so HiFi Corp and the Incredible formats, and nearly 4% like for like, which again, in the durable, semi-durable market, we believe is a strong performance. If you look at the three-year CAGR in excess of 6%, again, a very credible performance. 48 new stores opened last year, mainly Rochester and Sleepmasters stores.
Market share was a very strong performance, nearly 140 basis points of market share gained pre-COVID, versus pre-COVID, which again, from the team, a very good performance. Credit continues to be a big driver, particularly in the home segment. 20% of the sales came from credit, and if you add another 19%, which is lay-by, it tells you that this specific area of the market is a cash-strapped customer, and one that as a PEP Core group we understand very well. 10% contribution of online in the tech space, particularly the HiFi Corp and Incredible formats, and that represented a total growth of 44% in online sales. All in all, a very credible performance from JD Group. The final traditional retail business, The Building Company.
Building Company, again, feels the effect of load shedding more significantly than some of the other retail brands because their end consumer, being the small business contractor, is heavily impacted by load shedding. They delivered a 0.5% sales growth, not very strong, but better growth coming out of the specialist building material segment, which is where the Tiletoria brand sits. That business is slightly more protected from the macroeconomics given the fact it has a high corporate customer base. Like for likes of 0.9%, I think one should look at those in the context of the market.
If you look at one of our major competitors who released their results recently, on their 12-month basis in June, they were minus 13% like for like, and in their Q1 up to the end of September, they were minus 5% like for like. I think to have positive like for like in that market again, shows the good job that's been done by the team. Over a three-year basis, 3.2% CAGR. Only seven new stores opened predominantly in the BUCO format, and really a number of things that the team have dealt with in the last 12 months. Load shedding, as I said, a massive impact on them.
They've defranchised all of the Timbercity businesses or stores, these are now all corporate stores, and continue to consolidate brands within the wholesale area, where Brands for Africa now houses the previous MacNeil and Cachet businesses. That's traditional retail. If we move across to Fintech. The Fintech part of our business is predominantly consumer-facing financial services brands that engage directly with the consumer. On top of that, other business units, which are sales enablers. If you think about businesses like Tenacity that provide credit to the Ackermans customer, Abacus that provides insurance to the JD customer, and JD Connect, those are sales enabling businesses. I'll talk to you about the ones that are customer facing, the first one being Flash. As you're aware, this is our B2B business that operates in the informal market.
Whilst its customers are B2B, the reality is it does interact with lot of our retail customers who are using informal market or the informal trader to top up some of their airtime products, etcetera. We have 202,000 informal market traders on our base and another 19,000 tap-to-pay devices within the market. Very encouraging to see 12% turnover growth per device. That's a function of the profile of the traders that we have. The more tier one type traders who have higher turnover have been brought into the base. The second thing is where you add more value-added services onto those devices, so you increase the ability for the trader to transact.
In terms of the 1Voucher business, ZAR 6.7 billion of cash has been digitized through the Flash network, and that's a 72% growth year-on-year. In terms of our cellular business, Flash has a SIM distribution business. We saw 17% growth in cellular activations year-on-year, and overall, Flash injected another 3 million customers into our cellular base. Finally, 1Voucher. 1Voucher is the digital currency that Flash have created. As a brand within the informal market, it is gaining traction, and as you can see from the slide, negotiating more and more partnerships such that that becomes a very desirable digital currency for customers who wish to operate through a digital wallet. That's the Flash business.
Capfin, which is the micro-lending business, very good performance this year, despite quite challenging market conditions and a lot of activity from competitors in the area of loan consolidation. They opened 270,000 loans last year. That was a 24% growth year-on-year. 75% of these are six-month loans. That's the nature of the product mix, the balance being 12 months. 54% of those new accounts were activated through our store network. It shows you that whilst we are penetrating digital markets and direct to customer marketing from Capfin, our store network remains a very important part of the channel from a lead generation perspective.
All of this led to significant revenue increase within Capfin, as Riaan shared with you, but this is on the back of conservative credit granting, and so non-performing loans and collections have remained in line with expectations and no deterioration in that area. The final segment is really around efficiencies and leverage. The first area I'd like to talk about is PAXI. PAXI is technically a PEP product. It is a cheap courier service that uses a combination of our extensive store network and our extensive distribution capability. Last year, interestingly enough, more than 4 million parcels went through the PAXI system or the PAXI process. That's 11,500 parcels a day. I'm told that on our busiest day, we did nearly 21,500 parcels.
20% growth year- on- year, and becoming a very significant value creator for us. We have 2.8 million unique senders, and what's very interesting is that 24,000 of those are small businesses. In fact, 10% of the parcels that went through that system last year were actually small business that were using that facility. It represents a major opportunity for us currently in 2,800 stores. As Riaan has shown you, we have more than 5,800 stores in our network. The opportunity to grow this across our entire store network is in front of us and with something we'll be looking at. Finally, in terms of the central capabilities, I'm not going to talk to all of these, but call out specific ones.
The first one I would call out is Pepkor Data and Analytics. Within our data pool, we have 29 million known customers. We are able to market directly to these customers to segment that data and use that data to best inform the operating divisions or the retail businesses on how to deal with it. Secondly, they've developed some very unique machine learning and AI capabilities, and in areas such as markdown optimization, and we'll look to leverage those going forward. The second area is our properties business. Pepkor Properties, clearly responsible for the prospecting of all of those 300 odd shops we opened last year. More importantly, responsible for 5,700 leases, of which they probably renegotiate somewhere between 1,400 and 1,500 every year.
For the third consecutive year, we've seen negative growth in rentals, which is a phenomenal achievement from them. The third area is Pepkor Installations. That's our fixtures and fittings business. Again, 300 shops opened on time, plus all of the looted and flooded stores rebuilt. That's all come through Pepkor Installations and is a very credible asset for us to have to be able to control that end of our value chain. The final piece I'd call out is sourcing. At the moment, our Pepkor sourcing operation has managed the complexities of sourcing out of China, given all of the COVID fluctuations, very, very credibly. On top of that, have created a big share of the local sourcing market.
If you view the 12 million units that we do through our own Pep Clothing, business here in Cape Town, plus the local sourcing, statistically, we are the largest user of local sourcing of all retailers in South Africa. With that, I'll hand you back to Pieter, who will give you the forward outlook for the group. Thank you.
Okay. Thank you, Sean. Just a few more slides before we will take some questions that we can hopefully answer. This is the crystal ball stuff outlook for us as a group. I think most leadership teams in South Africa will highlight these issues in the operating environment. High employment, low GDP, load shedding, more expensive stuff to pay for by our customers. Those are sort of general market movements. Specifically to Pepkor, we've seen a massive shift to smartphones and customers being able to transact outside of our stores or when our stores are closed.
The networks building new capacity, 4G, 5G, legislation supporting that, has made a massive shift in the landscape that we are operating in, and we have to make sure that we follow our customers' needs, and we can contribute outside of our stores as well. We still stay the course in terms of our purpose to really make a difference in our lives of our customers, and we do that by employing the best people and being the best place to work, and doing that at the best possible or lowest cost, as Riaan alluded to, and this plays into our strategy. How do we do this? We make sure that our products are needed and wanted and that they are close to our customers.
In other words, they can access them through our physical stores, but also our informal markets and other channels, the digital channels being the big growers, or give growth path in this environment. We give them various payment options from retail credit and card payments, as the market is developing and hopefully soon of the phones as well. Of course, we are a discounter, retailer and price, and the low cost of doing business is at the heart of what we do. That strategy has remained the same. We think it's more defensive, in many places where the market is now tougher, we believe that's a good strategy and we will stick with that.
We always have the opportunity when we do have a change of leadership, like we've had, to review a business. Both Sean and myself coming new into the business, we followed a process called the Value Creation Plan, which is really a portfolio review. In that process, we've identified some opportunities, but the first and foremost is a relentless focus on the customer, how their world is changing and how we can service the needs and provide the products that fits into that world. A lot of it is now actually moved, as Sean has explained, in the formal market to informal market. Although the formalized retail market is still developing with some very exciting formats, and exciting market dynamics. How do we do that?
Sean has explained it, that we look at our assets and our core competencies or capabilities, we try and see how we can use those to get a competitive advantage over our competitors, also to make sure that we can leverage that for our customers' benefit. Lastly, leadership and culture. In our business, that is a cornerstone. First of all, I must thank Leon Lourens, who aptly, very competently, led this group over the last five years. Leon retired. He's now fishing. The rest of us are working. That culture in PEP is still very alive, or Pepkor is still very alive, the 50,000 people who are out there working every day to do the best for the customers, a special word of thanks for them.
Things have not been that easy or the environment has not been that easy, everyone is staying the course and making sure that the customer get the benefit of all of that. Those are sort of our focus areas in the meantime, we will now take some questions and hopefully provide you with some answers. Thank you very much.
Good morning. I'm gonna go through some of the questions that we've received. I'm gonna first read them out, and then I'll try and answer them. The first one we received was around the changing product mix in Flash, and what is the impact of that? Maybe just again to confirm and explain what happened in Flash about two years ago is we introduced a new product called Eezi Airtime. Now, Eezi Airtime is an airtime voucher or a voucher that we sell that's not linked to a specific network. What happened previously is Flash used to sell either MTN, Vodacom, Telkom voucher, and we recorded the full amount on the sale of that.
What's now happening is when we do the sale of the Eezi Airtime voucher, it's not linked to a specific network, we only recognize the commission on the sale when the customer decides do they wanna change it to a Vodacom, MTN, Telkom voucher, et cetera. That's why we've changed it and why that's got a negative impact on top line growth, 'cause now we only recognize commission and not the full sale like we used to. First question. The second question is what is the impact of IFRS 16 on lease modifications? What's the view going forward? Again, maybe just to confirm, in the previous year, we had a lease modification number of above ZAR 900 million. That included ZAR 265 on the Steinhoff acquisition. If you eliminate that, in 2021 we had about ZAR 700 million of lease modification.
This year it was about ZAR 760. We do anticipate that number to come down going forward, so it'll probably be closer to ZAR 600 million, 'cause the main reason for lease modifications are either when we close down a store or on renewal if we have a reduction in the rental that we pay. We have seen in the past two years obviously huge rental reductions on renewals, as I previously communicated. We do anticipate that trend to come down and have more lower increases or almost no increases on rental increases on renewal. Third question is the impact of the insurance proceeds and why we did not add back the full amount for HEPS or for EPS.
As you would've seen the results, we only added back the ZAR 300 million that we received from Sasria for compensation for the write-off of the fixtures and fittings in the 550 stores that was impacted by the social unrest in the previous year. That was a capital item, and we added it back on earnings per share. The rest of the proceeds that we received was either for replacement of inventory that was written off, the other amount we received from Sasria was mostly for inventory written off, that's purely a net zero impact. We wrote off the stock, we received the money from insurance, there's an zero impact on the bottom line. The rest of the insurance proceeds we received was either cost recovery, mostly on the flooding this year.
We spend the expenses, and we receive the cost back from the insurance, again a zero impact. The last one was on Business Interruption money that we received back from the insurance. Again, Business Interruption is there to compensate you for the loss and the profit for those stores that did not trade during the year. You basically get Gross Profit less expenses from insurance, so it places you in a zero bottom line impact as if those stores would've opened and been trading. In the next financial year, those stores are now, almost all of them, back up and running and trading, so we'll see the normal sales coming through and the normal profit on the bottom line. Again, impact is really zero. Just places you back in the same position as if all those stores have been trading.
That's why it was not eliminated as a once-off item. The next question was around how sustainable do we think is The Building Company, the JD Group margins that you've seen this year. We do think this is sustainable. Depending on, obviously, on trade, we think we've sort of reached a level long term that we're comfortable with. There is probably still a bit of upside on the JD Group side, but this is in line with what we've always benchmarked, specifically for The Building Company and also for the JD Group or the furniture segment. We think it is sustainable going forward with maybe still a bit of upside in it.
Just again, the outlook on inflation on, specifically on product for the rest of this or the remainder of the year next year and what the impact of that is on GPs. Going to summer now, as we previously communicated from an inflow perspective, we do see inflow inflation being around the 8%-9% for inflation. In the winter next year, we do anticipate it will probably be just over 10%. As we've always communicated in the past, from a inflow margin perspective, we don't change it. It stays exactly the same. What we will look as we look at product mix, composition of product, to obviously make it more affordable for the customer, but we don't change our inflow GP. It stays the same. Thank you. Those are all the question from the line. I think I'll hand over to Sean now to answer the next questions.
Thanks, Ryan. Morning again, everybody. A couple of questions directed to myself. The first was really around the digitizing of cash that I mentioned earlier in the presentation. I mentioned a number of ZAR 6.7 billion. That ZAR 6.7 billion refers to the 1Voucher part of the Flash business. The total value of cash that passes through the Flash ecosystem is in excess of ZAR 2 billion a month. It's a very sizable number, and again, shows the unique position of our group to maximize contact with our customer through all of the channels. Second question was really about stock levels, and are we concerned about the level of inventory and the potential for markdowns.
I think when we look at the inventory number, the thing we need to consider is it comes off a low base, so last year we had many disruptions in our supply chain, probably understocked. The base is low and therefore the increase looks high. The second thing to remember, it's really about the freshness and quality of stock. Over the majority of our business units, we are comfortable with the level of stock freshness that we have. The one business that stands out is obviously Ackermans with a low like for like, as I mentioned earlier. There, we honestly believe the business has taken all of the necessary markdown actions that they need to, and that we shouldn't face any serious issues with old stock. Third question was really around PEP and Ackermans numbers combined.
We're aware that we reported these together in the past, the total growth number was 4.1% for the combined businesses. If you exclude the impact of flooding, that probably gets close to 5%, on a like for like basis, that number was 2.1% for the combined businesses. Fourth question was around cell phone sales. If you exclude cell phone sales in PEP and Ackermans, how would the clothing and home sales have looked? The reality is these would have looked higher. The impact of cellular growth in both those businesses was decretive on the total sales number. The final question was really around The Building Company and the defranchising of the Timbercity businesses. First question was, why was that done?
In short, there is no other business unit within the Pepkor Group that operates on a franchise model. It was simply aligning the Timbercity business with the rest of the Group assets. The second question related to if you backed out those defranchised models, what would the impact have been on the total sales growth? The reality is, I think it was less than five stores that were defranchised, and so it would not have materially impacted the TBC numbers at all. I'll now hand you back to Pieter.
Thank you, Sean. There's only two questions left for me to answer. If you have any more detailed questions, you can contact Ian Nel. These emails are on the website. Along with the roadshows, we'll try and get you back to you on those. two questions been allocated to me. The first was, how do we think or how do we see the Brazil expansion going? As we reported in the slideshow, we are ahead of our own plans in Brazil, but it's early days. It's still a subscale business. So far, our expectations are being met, and we sort of have five additional stores that we have allocated to try and get a little bit more momentum. Just to say, it's still small, but going according to plan.
We had a question about whether we'll expand further into Africa. At the moment, our African business is still in what we call an efficiency phase. We're trying to be as efficient with the capital that's in there, with the trading opportunities that's there at the moment. We don't have plans for further countries to be added. I had another question about how the trade is or has been going post the set of results. We'd started off with quite well in October, pushing double-digit growths. In November, that has slowed down. We look at the quarter as a whole because there's quite a lot of noise and promotional activities like Black Friday and obviously pre-Christmas sales, post-Christmas sales, and then there's the unknown, the other black one being the blackouts. Hopefully we will navigate those well.
We've got good coverage from a power backup point of view, especially in PEP and catching up in some of the other businesses. Trading has been going according to plan, but we'll only really know once the so-called golden quarter has come to a close. That is it for today. Thank you very much for your attendance and all the best.