Good day, and welcome to the Pepkor Interim Results presentation for the first six months ending 31st March 2024. As per usual, I'll briefly do an overview of the results. Rian, our CFO, will unpack the financial performance. Sean will give much more detail on the different business unit performance, and then we'll end up with an outlook and a Q&A session, and you're welcome to send in your questions as we go through the presentation. Again, first half results, we're quite pleased with the revenue growth, specifically our Fintech revenue growth, and more about that later. We spoke about the increase in the gross margin, the retail margin, supported by Ackermans recovery. We've reported a good normalized operating profit growth.
The world normalized slips in there because of some once-off numbers that Rian will explain in his presentation, and then you will see the normalized HEPS growth and still quite high cash conversion. Our strategy remains the same as we've communicated in the capital markets today. We still think it's a good defensive investment for our shareholders, but we have significant growth opportunities as well. Going as how we have reported in the last few communications to the market, we split the businesses in traditional retail and Fintech. So in Q2, our sales performance strengthened from what we reported on in Q1. Sean will take you through some of the market share expansions that we've had. I spoke about the recovery in gross margin.
Some of the strategic implementation of the women's standalone retail concept, Sean, will give you an update on. We still like what we see in Brazil, and we're accelerating that investment, and we are still expanding stores, although it seems to have tailed off in terms of the demand in the market, and more about that later. The environment has not improved greatly, except for maybe in the short term, electricity disruption has been less felt in our stores. We haven't seen the customers getting a better read on that, but certainly, we have to take that as a positive. The other high living cost, unemployment, et cetera, the macro still remain constrained for our customers. There's obviously a higher crime and infrastructure damage that everyone's aware of.
The supply chain disruption is something that's increased in the last six months, with the especially disruptions in Durban Port, in the shipping, and supply chain, and we'll talk about how we're planning to deal with that. And then, of course, the upcoming elections has created some uncertainty in the markets, capital markets. People have different views on it. For us, in the short term, we are just trying to see if there's any disruptions in our supply chain or in our stores, and we've certainly planned for that. In the Fintech section, we specifically highlight this separately because we believe it's a high growth area for us as a business. We're allocating a lot of capital to it.
Again, Rian and Sean will expand on that, but largely driven by customer need in the retail credit world, where we continue to open up a significant number of new accounts, to meet the customer demand, but, making sure that it still meet our quite strict credit criteria. We've actually lowered, limits, and we actually, making sure that we don't put the customers into stress. FoneYam has been a good success for us, where we, have a rental, handset rental product, which our customers already really like, and we are actually almost unable to meet the demand for that. In the insurance policies, we, as you know, we own Abacus insurance license, and we have, taken it wider through the group.
It used to sit in the JD business, and so we're also getting a great uptake from the customers on that. And then we keep on expanding our informal market reach through the Flash business, which again, we will expand on later. In terms of the capacity we built, we launched +more, which is our digital channel, and we've had great success in the first couple of months of launching that product. Just on the capital allocation, where we spoke to the market before, how do we look at our business in terms of making sure that we get the right return on our capital? I think it's been reported that we've announced The Building Company disposal, waiting for the antitrust or the anti-competitive authorities to rule on that.
And then, of course, in our portfolio ourselves, being with the market the way it is, we've focused a lot on cost reduction, especially in our big, big units like PEP and Ackermans, and that also has come through in this, in this half results. So I'll hand you over to Rian now, who will deal with the detailed financial performance. Thanks. Thanks, Rian.
Thanks, Pieter. Morning, everyone. So, as Pieter said, I'm gonna take you through the financial results for the six months. I think just to start off with, when you read all these numbers for the six-month period, just two things to take into account: firstly, all the numbers, barring one or two, that I'm gonna present, only focuses on continuing operations, so that excludes the sale of The Building Company. The second thing, when I talk about normalized numbers, I exclude the one-off impact of the lease modification last year we had because of the move from the Fibers PEP, Fibers Road DC to the PEP Hammarsdale DC, the 392, which I'll show to you. So again, as Pieter has commented, we're very pleased with the growth of 9.5% in revenue.
Like for like, slightly slower than what we expected, but still a good number. But really the growth coming from the revenue in the Fintech segment, and I'll unpack that a bit more. Very nice recovery in gross profit margin for the period, mostly driven by the retail improvement in the retail gross profit, really underpinned by the Ackermans performance, where last year we had a significant amount of markdowns and discount, and this year, much more full price merchandise being sold. Normalized expenses growing at 8.2. Now, there's quite a bit of different numbers in the operating expense growth, which I'll unpack.
One of the main increases there is really our debtors cost, up by 48%, and there's one or two anomalies, which I'll unpack further, but if you eliminate all those anomalies, the normalized operating profit grows by 8.2, which is very nice, in line with the 9.5 revenue growth. So this really plays out in our operating profit growth or EBIT growth. Again, on a normalized basis, it's 13%. If, however, you include the ZAR 392, the statutory increase is a 4%. Similarly, on the HEPS growth, up by 7.8% versus statutory, down by 3.1.
The main reason for the difference between EBIT and HEPS is really the additional finance costs we had to pay during this period, but also, to a lesser extent, the higher effective tax rate we had in this period, which I'll unpack a bit further. So some of the balance sheet indicators or cash flow indicators for the period, inventory up by 3.4%, although inventory in stores and in DCs is down on last year for the same period. We had quite a significant amount sitting in goods in transfer, either on the sea or in the ports because of the port congestion or the shortage of containers. So overall up, but in store it's down. As we mentioned, good growth in the books.
I already communicated at the end of last year that we're gonna go, obviously, on opening a new product, called FoneYam. That's already started to deliver, and then with the further growth in the operability that we launched about two years ago, Pep now also having created w e've invested ZAR 3.1 billion during this period. Cash conversion, as Peter mentioned, we looked at a 12-month rolling because of the difficulty where Easter usually falls in March and other complications we've had with creditors' payment. We look at a 12-month rolling, so 85%, which is above our target, versus the 71% we had last year. And then we're still very happy with our return on net assets at 21%, which we think, still think is very good. However, I'll backlight it, is slightly down on where we were last year for various reasons.
So just again to confirm, we did announce the disposal of The Building Company at the end of February. There is an impairment due to that sale of ZAR 396 million. That impairment is very much in line with the impairment we had when we previously sold it in 2020. Also, it was also around the ZAR 380 million. The proceeds or the consideration from the sale is ZAR 1.2 billion. That will be utilized first to reduce debt, but also because of the strategic growth initiatives, the book build, et cetera, we will utilize it and apply it in there to stimulate further growth within the group. And as Pieter mentioned, we have submitted all the information to the Competition Commission. We're just awaiting the final approval for this deal to go through. So this is shown as, as at hold for sale.
So just to confirm again, I spoke about this earlier, but just to clarify again for everybody, from a statutory HEPS perspective, up or down, rather 3.1% compared to last year, so ZAR 0.77 to ZAR 0.75. However, if you add back that DC lease modification of ZAR 392, we show a growth of 7.8% or close to 8% for the period. The impact of the sale of the building company, obviously, has now meant that there's one segment less. So in the past, we were used to have a separate segment for the building materials. You'll see that's now no more. We've now got three segments remaining: the clothing and general merchandise segment, the furniture, appliance, and electronics. So those two together make up 87% of the group revenue, and we call it really traditional retail.
We have the Fintech segment, which is really made up of two sections: financial services and the informal market. That in total makes up 13% of the group revenue. We do obviously anticipate, as you've already seen, that the Fintech segment will grow faster than the retail segment for the next couple of years because of all the initiatives we've launched around that. So again, just coming back to the revenue for traditional retail segment, clothing and general merchandise grew by 8% overall, mainly driven by the good growth numbers we've seen in Avenida and to a lesser extent, Speciality. On the furniture side, very good growth from the furniture side.
We've had a slight slowdown the last couple of years, a good performance this year, but on the other side, we've had a slowdown on the tech side, where the last two years we had very good growth numbers on electronics and appliances. So if you look at what are the main drivers behind it and how do they play out? So from a sales growth perspective, as I mentioned, like for like, just over 5%. Normally, as I've communicated in the past, we'd like to get a like for like of closer to between 5% and 6%, so just sort of slightly falling short of that target. We usually like a growth for new stores of between 2% and 3%.
So that was obviously less than that for the period, and that's mainly driven by the fact that we have opened fewer stores than originally planned during this period, and we also closed more than what was originally planned. From a cash versus credit sales, the big discussion point the last year, as I mentioned, with interoperability, we've obviously seen a big growth in credit, specifically on PEP. And Sean will elaborate on that slightly a bit later, a bit more. But our overall credit has now gone from 10% last year to 13%. We are still predominantly a cash retailer with 87%, but we have seen a higher percentage in PEP, Ackermans, and in Speciality on credit spend, which has really driven that 34% increase compared to last year.
On the Fintech segment, as Pieter mentioned, is really where the main growth is coming from at the moment, and we do anticipate this to continue for the next two-three years, up by 24.5% to close to ZAR 6 billion. Very pleased to say, with the last two years, we've had negative or very low growth on the Flash side because of the change in product mix on their side from normal airtime vouchers to easy airtime. That is now in the base, and very happy to see almost 21% growth on the Flash side because of the return more of normal airtime voucher sales as well.
Tenacity, really driven by A+ growth in FoneYam, up by 54%, and then also very good growth from Abacus, where we've got a lot more focus now on insurance, and that's specifically driven by a new product, Credit Life, that we've launched in the Capfin, Capfin book, which has been very successful so far. We mentioned earlier, good recovery in gross profit margin, 200 basis points overall, 170 basis points, as I mentioned, coming from retail, mostly driven by Ackermans, as I mentioned earlier, but also a nice improvement from the PEP side. They also had lower markdowns and discounts in the first quarter compared to last year, and they also had a once-off benefit due to the drop in container cost, in the second half of the first half, in the second quarter.
So that was also sort of a once-off benefit that helped them to improve that gross profit margin. Still, the trend we've seen for the last two years already, the nice improvement in GP on the financial services side, really driven by the high interest rate, the growth in the books, that has continued through this period, as we've already shown. And then we also had a nice upside on the Flash side, with a small improvement in their GP margin as well, resulting in the 200 basis points overall. Other income, a drop for this period of 30.5%, but that is mainly due to the once-off insurance recovery we had last year of ZAR 150 million.
I'm sure you can all remember that was mainly due to the floods that we had in the previous year, and most of it was to do with business interruption, interruption recovery that we had, so a loss of profits that was recovered. If you eliminate that, it's down by 3.6%. Main reasons for that is we've had lower number of transactions on money transfers, and also DSTV payments is down compared to last year. Cost of doing business, I said d id say earlier, there's a lot of activity anomalies in here for this period. Overall, up by 18.9%, said earlier, mainly driven by debtors' cost. However, if you eliminate debtors' cost and depreciation, it's still around the 18%, but there's three different lines this year, that really impacts it, or this six months.
The first one being Forex losses, ZAR 234 million compared to last year's ZAR 58 million, mainly driven by repatriation of cash from the African countries, so countries outside of South Africa. Then also because of the delays we've had on the ports, etc., we've had to cancel some of our forward cover contracts, Forex cover contracts, which resulted in a loss. We should, however, pick up the benefit of that in the latter part of the year. Lease modification, this year, ZAR 210 million. Last year, it was ZAR 640 million, and that's again, because it included the ZAR 392 million once-off lease modification last year. Then a new item that we want to highlight is the cost of customer acquisition.
You would have seen, showed you the growth in the book the last year or so, A+ specifically, and then also now with the opening or the start of the FoneYam book, we do invest quite a bit in customer acquisition cost in that. That number is more than double last year. Last year, it was ZAR 88 million, and that's really to facilitate the growth of this book and the taking of new customers. There an anomaly here, why we highlight this, because on the A+ side, you really only see the benefit in year three, when a customer breaks even in Tenacity, and we, on average, have a customer on our books for slightly longer than five years.
You get the full benefit really in year 3, 4, and 5, but you take the full cost of the canvasser cost in year 1, and then obviously similar on the debtors cost, you take the full provision upfront. But again, underlying two main drivers of cost, still very much under control, being salary costs at 8.6%, and then also property costs or rental costs going up in totality by 5.1%. Just one thing to take note of, on the 8.2% normalized, that's further impacted by t he growth in Avenida, we're obviously rolling out a lot of stores, so their growth is much higher than the growth we've seen in South Africa and Africa.
So if you eliminate Avenida, the cost growth is 5.2%, which is a very good percentage, really driven by a lot of cost, cost-focused initiatives in driving costs down. Lease modification, I've mentioned it. As I've communicated the last three or four years, we do anticipate this number to come down over time, and that's what you can see here. Last year, we had the anomaly of the 3.92, which I already mentioned. So generally, in the past couple of years, we've had huge reductions in rental and lease renewals. You'll see it's now down to 1.1%, so it's not the 8, 9, 10% we saw two or three years ago.
So we're starting to see a much more normalization of rental renewals and also the process we went through in store portfolio optimization, specifically in the JD business, but to a lesser extent on specialty. It's now coming to an end, and that resulted in a lot of these lease modifications, which are starting to play out now. So again, just to confirm, operating profit, statutory-wise, it's 4%. As I mentioned, if you add back the 392, it's a 13% growth in operating profit. And then where does that come from? Mainly driven by the clothing and general merchandise side and also by furniture and electronics. Clothing and general merchandise, really mainly due to recovery of Ackermans, but also to a lesser extent, we've seen some good numbers from the PEP side as well for this period of good profit growth numbers.
The JD side, as I mentioned earlier, eliminating a lot of unprofitable stores and focusing on the store portfolio, although their top line was at 4.5%, that meant that they could deliver because they eliminated all the unnecessary costs and unprofitable stores at 23% growth. Then on the Fintech side, mixed results, good profit growth from both Flash and from Capfin, both growing by more than 20%. But because of the investment in the books from a canvas of cost and also from an upfront provision, those books obviously have grown negatively, both A+ and FoneYam, and that's offset the big benefits we've seen in Flash and in Capfin. Just looking at the EBIT margin percentage, that you'll see on a like-for-like basis, up by 30 basis points to 11.8%.
If you can remember, in the past, always guided, we wanted to get to 12%. That target is now actually moved on to 12.5% because of The Building Company. Historically, always had a 4%-5% EBIT percentage, not part of the equation anymore, not in these numbers. The second thing why we think is because at the moment, obviously, with the lower profit in the books, that should show start profitability from next year onwards, FoneYam, and the year after that, nice profit on the A+ side, as I mentioned earlier, so that should then move closer to a 12.5%. Cellular ongoing revenue, remember, this is the first time we showed this to you at the end of last year. We also showed it in a Capital Markets Day.
Just again, to refresh your memory, 20% of ongoing revenue really comes from the Flash environment, where we sell SIM cards to the traders, which they then onsell to their customers. Then we sell SIM cards with our handsets in predominantly PEP, Ackermans, but also in the JD Group in PEPCO, and that SIM card then ultimately generates ongoing revenue when the customer uses that, that SIM card. Very pleased to show that we had almost 9% growth for this period, mainly driven by higher spend in, on MTN and on Vodacom.
Just to take note, the growth will slightly drop in the second half of the year because we've entered into a new long-term agreement with Vodacom, so we've reset some of those rates, and they will then build up again over the next couple of years, and we've got quite a few initiatives to ensure that we will get back to that growth very quickly. So just to break it down, last time, I got a lot of questions on: Where's the operating expenditure on cellular? So I've broken it down. So just to again confirm, revenue growth in cellular is driven by handset sales, the GP on handset sales, the margin commission we make on airtime and data, and then ongoing revenue. GP that we make then is ZAR 2.2 billion.
We've got operating expenditure of 1.1, so the operating profit we make in cellular in totality is 1.1%. You'll see that's grown by 20% on last year, mainly driven by better GPs on the handset sales, and better sales in, on handsets as well, but also by a reduction in cost in our operating environment, distribution, but also we're starting to see a drop in shrinkage and burglaries in a lot of our stores because of the start of locking devices. That's resulted in a drop in burglaries in most of our PEP and Ackermans stores. So just again, to confirm, finance costs, spoke about it earlier, up by 12.1.
You'll see the finance cost and IFRS 16 component very much in line with last year, the same period, but it is up on the, call it, the bank finance cost is up by because of the higher interest rates for the period. As I mentioned earlier, the average debt or net debt is almost exactly the same for this six months compared to last six months. I'll show that to you. So if you look at pure interest rates, it's 150 basis points higher for the same period this year compared to last year. And just a reminder, our average cost of debt at the moment is 9.7%.
Effective tax rate, you'll remember last year we had the SARS settlement, and we also had a rise of a deferred tax asset in the first six months, which dropped our effective tax rate to 20.3% on continuing operations. We've had a further benefit on that settlement we had last year that played out in this year's results, so it's still below the 27%, being 23.6%. On ongoing, you'll notice on total operations, it's about 26.5%, and that's because of the impairment we've had in The Building Company when you look at the results. Again, just a reminder, as I communicated previously, the full year expectation is still 24% for this year, but next year we should return to a more normalized 27%.
Inventory levels, spoke about this earlier, up by 3.4, mostly because of the challenges that we've had in the supply chain. Goods in transit up by a significant amount. As I said, the physical stock and inventory in stores is down, but yeah, also still an impact of the opening of the new stores, giving us that overall 3.4%. That number we anticipate to grow slightly more in the next half of the year because we have made the decision to extend the lead times on bringing stock or inventory in because of the challenges we currently see in the port. So we expect that to be closer to a 6-7% growth for the full year. So then on the books, the big growth number that we've seen.
Remember, just again, a refresher, we see these books that you currently see, Tenacity or A+ Connect and Avenida, are sales enablers. We don't expect them to generate big profits, but they've got to show a positive profit number, not a loss. So the Tenacity book or A+ book, you'll see, grew to ZAR 5.6 billion, fairly sizable book. Still very comfortable with the non-performing loans. You see, it's very much consistent with year-end and last year, so we've kept the provisions at the same level, and we do anticipate to say that level is slightly even reduced towards year-end. Similarly, on the Connect side, we have seen a slight increase in the first part of this year, but that's normal.
After the January, December period, we usually see an, the non-performing loans going up in February, March, but then it usually improves towards August, September of every year, after we've written off the bad debts in, July and June. Avenida, also at the same level, slight growth there because of the stores that we've opened. Bad debts and non-performing loans still very much under control. And these are the two books that we do see as profit generators. They need to stand on their own. Capfin don't enable any sales in our stores. That's why we do and, do require return on equity of above 20% in Capfin, which we've successfully achieved for now the last four, five years.
But because of the rollout of the 24-month product, you'll see the book is now up to ZAR 3.1 billion gross, but non-performing loans still looking very good, and we're very conservative on our provisioning level. Then the new book, the rental product that we spoke about, the FoneYam started about six months ago, seven months ago, sitting at ZAR 260 million at the moment. Still very early days. We still can't exactly determine what the non-performing loans will be. We'll only fully be able to evaluate that at the end of the year. But initial indications is it should be better than what we see on the A+ book because of the device locking capability and customers coming back to pay their account, to reactivate their phone.
On the debtors cost, overall, I spoke about the 48% increase, really driven by the growth in the book, specifically A+ and FoneYam. As you can see, if you break that down into different components, bad debts written off is up in line with the growth of the books, but it's really the upward provisioning that we have to take, which you can see is almost doubled from last year, where the real impact is on the growth in, in debtors' cost. How does this played out in our cash generation for the period? As I mentioned earlier, ZAR 3.1 billion invested for this period in the growth of the books, predominantly A+, but also on Capfin, as you would have seen. To a lesser extent, FoneYam, still early days. We had the investment in inventory.
It grew by the 3.4 that I showed earlier. Then we also, as we had at year-end, because of the cutoff, we paid just over ZAR 2 billion of creditors before cutoff. So that impacts your cash conversion, and your cash generation overall, but that will correct itself at year-end, and again, why we rather looked at a 12-month rolling number than only at the 6-month period. So I mentioned earlier, debt levels. As you can see, they're very much in line with last year because of the early payment of the creditors of ZAR 2 billion. Our net debt to EBITDA was 1.2, which is slightly above our internal target of 0.5-1 times.
So if you add back that creditors payment, we're exactly on target, but still very much within the covenant requirements and agreements we've got with banks. On our debt repayment profile, still looking very good. Very much, we've got an even spread over the next three years. Had a very successful bond raise in March, raised ZAR 2.2 billion at better rates than what we had previously, and we utilized that to replace the current bond. We had a ZAR 1.4 billion repayable now in May, and we settled a term loan earlier that we had as well, of ZAR 500 million. So very happy and comfortable with the bond rates and the level of debt. As I mentioned earlier, we look at return on net assets.
That's our key indicator for the returns that we get on the investments we make from a capital perspective. Still very happy that's way above the 20%, so hitting the 21% is slightly down on last, as I mentioned, but that's mainly driven by the investment in the books and the fact that we'll only see the profit being generated from that in year two and three. Just as a reminder, because I still get the question on a regular basis, why don't we look at return on equity? So again, we've got the ZAR 52 billion goodwill and intangible assets that we inherited, sitting on the balance sheet. That's taken into account in that calculation, which means our return on equity is only 8.4%, and that's why RONA for us is a better indicator to look at.
Capital allocation overall, you'll remember I guided you at the end of last year that we should end up with a 2.8%-2.9% investment on CapEx on revenue. We are sitting at 2.5% at the moment, and that's, as I mentioned earlier, because we have opened fewer stores than originally planned in the first half of the year. We'll pick up the number of stores in the second half of the year and open more, but we'll probably still end up at about 2.7%-2.8% CapEx investment for the year. As I mentioned at the end of last year, the question is always: what are we gonna do with that excess cash that we're generating?
So, we did indicate we need to invest it in the growth of the books, and that is how it played out, the ZAR 3.1 billion invested. And then, as we've mentioned earlier, we are still continuing looking at M&A opportunities in the market. And again, if the right opportunity comes along, we prefer to fund that from normal cash generated. Just again, a reminder, we have not in the past declared an interim dividend for this period, and in line with history, we again will only be paying a full-year dividend at the end of the period. So again, just to remind everybody, this is a question we get a lot with all the tax settlements, insurance recovery, what is really our normalized earnings for this financial year? If you'll remember, we ended up with almost 141 cents last year.
The 392 on the lease modification you have to add back, which is ZAR 0.078, gives you 133. And then we had the 53rd week last year, so you have to take that out or, or add it back as well, the 5.9 cents, give you 127 cents. So that's our view, is really your base for this year, that you have to compare our full year results against. Just a reminder why we don't include some of the other ones. Insurance recovery is really a replacement or recovery of our lost sales and lost profits. The tax settlement you're seeing is not, is not, didn't only impact one year, but there was still or there is still a benefit in this year, and that's why it was not classified as a once off.
And then just a reminder, we had the ZAR 6.6 billion impairment at the end of last year, which does not affect HEPS, but it does affect your earnings per share. So that will help us at the end of this year. So that's a quick overview of the results. I'll now hand over to Sean to take you through the business unit performance. Thank you.
Thanks, Rian. Good morning, everybody. As both Pieter and Rian said, I'll take you through a review of the various operating units within the business, but I thought it would be good to start just with our strategy on a page. This is something we shared at the Capital Markets Day. Really, the Pepkor strategic model is very, very simple. It starts with an understanding of our customers' needs and the ability to identify what needs our customers have. Those needs can be the need for physical products, it can be the need for financial services, it can even be emotional needs, like the need to feel connected or the need to feel secure. Once we have a deep understanding of those needs, we ask ourselves a simple question: Can we execute on those needs? Can we solve those customers' problems?
That really involves the three Cs. Do we have the capability to do it? Do we have the capacity to do it? And do we have the capital to do it? And where we don't have the capability or we don't have the capacity, can we acquire that capability or capacity? Can we partner with somebody, or can we develop it ourselves? And once we know that we have the ability to execute on those customer needs, because we're not a Section 21 company, we ask ourselves whether we can monetize those needs. And how do we create revenue streams, whether it's through the sale of physical products or revenue streams that flow from financial services. And that, in essence, is an ongoing cycle, where each business unit in each division asks themselves: What are my customers' needs? How do I solve them?
Can I monetize those? The net result of that is that Pepkor ends up trading through a number of different channels. Clearly, the traditional retail or bricks-and-mortar channel, the informal market channel, through our 165,000 Flash traders, and more recently, the digital channel, both through the online channels that the individual retail companies have, as well as the +more digital channel, which I'll talk about in a little bit more detail later. Secondly, we operate in a number of different consumer segments, and it's true that Pepkor's always been known as primarily a discount and value player, but clearly within our specialty division and within our FinTech division or the JD Group, we do trade in higher market segments than just purely discount and value.
Then clearly, we trade in a number of different categories, those being clothing, footwear, accessories, homeware, general merchandise, electronics and furniture, as well as all of the financial services products. That entire strategic framework is fundamentally underpinned by three key enablers. Firstly, our scale. Nearly 6,000 shops, 165,000 traders, very well-developed distribution capability. We use that scale to enable our business models. Secondly, the use of data and technology, and clearly that becomes more and more prevalent as time goes on. Finally, our 50,000 colleagues who work in the business, and our unique culture that focuses on delivering results. That's essentially our strategic model. What that strategic model then supports is what is at the heart of what Pepkor has always been about, and that is about growth.
Again, we have a very simple way of thinking about growth. We think about it in the form of wallets. So our first lever that we look at is: How do we gain access to more wallets? In other words, how do we grow our customer base? The second component of it is: How do we actually take a bigger share of our customers' wallets? And that's through category extension and obviously moving into more and more financial services-related products. And where possible, can we actually grow the size of an existing customer's wallet through the responsible extension of credit?
When it comes to growth, clearly, Pepkor has a history of being focused on organic growth, as Pieter mentioned, but I think we've demonstrated in the recent past that where we want to gain quick access into a new geography, acquire a new capability, or enter a new segment or category, we are willing to look at acquisition or JVs and partnerships. And then I think, again, as Pieter said, we try and think about our business in four different segments. These are all interdependent. However, it helps us when it we focus our energy and we focus our capital allocation. First segment is traditional retail.
The majority of the growth focus there is around protecting our existing market share in dominant categories, such as kidswear and schoolwear, and the like, and then looking at growing into new categories and new geographies. The second area is financial services and connectivity, and that's really about our credit business, our insurance business, our lending business, and our cellular business. Third element is the informal market, which is the Flash business and those 165,000 traders. And finally, our digital channels, which, as I mentioned earlier, are the e-commerce channels that each individual retailer operates through, and then the group digital channel that we are developing through the +more program. So if we move on to traditional retail, and again, a reminder, this involves the CFH business or CGM businesses of PEP, Ackermans, PEP Africa, Speciality, and Avenida.
Then we have our cellular businesses, which is PEP Cell, Ackermans Connect, and Incredible Connection cellular. And then finally, we have our furniture and electronics division, which incorporates all of the JD companies, being Russells, Bradlows, Rochester, Sleepmasters, HiFi Corp, and Incredible Connection. So at a headline level, for the sales performance for the traditional retail segment, starting across the entire business, total sales growth of 7%, which, given market conditions, we feel was a strong performance, and as you'll see, that was underpinned by the CGM segment. Like-for-likes at just over 5.1%, and what you'll notice from the slide is a theme that you'll see throughout, which is a much stronger Q2 performance versus Q1, and that was essentially driven by a very strong back-to-school performance both in CGM and in Incredible Connection.
If we look at the CGM segment in isolation, total growth of 7.5%, that was driven by very strong sales growth in Speciality, Africa, and Avenida. Like-for-likes of 5.3%, again, strong Q2 at 5.8%, thanks to back to school. And within the CGM segment, that sales performance delivered market share gains on a 3, 6, and 12-month basis as measured by the RLC, and that just gives you an indication of how constrained the market is, or was during that period. From a furniture and electronic segment, more muted growth at 4.3%, but again, if one reflects on the performance of some of our peers, you could describe that almost as best-in-class.
Like-for-like sales growth of 3.9%, which I'll unpack in a bit more detail. And again, a strong Q2 performance, both driven by back to school with an Incredible Connection, and a slightly softer base in the home business, which meant that Q2, sales growth was stronger. In the furniture and electronics business, again, that sales performance meant that we took market share in certain core categories. Now, that gives you an overall view of the H1 performance. I think what is worth noting is that the volatility within the months of that six-month trading period was quite extreme. What we see from a consumer behavior perspective is they are very driven by periods of money in the market, and they are very driven by events.
So things like Black Friday, Christmas, Easter, and back to school, driving a lot of consumer activity as well as money in the market. However, in the intermediate periods, trading being quite, quite difficult. Easter is the other complexity here. So you'll recall that Easter fell in the April trading period last year. This year, it fell in March. On a comparable like-for-like basis, measuring trading period with trading period, we were very encouraged to see double-digit sales growth in our CGM businesses and high single-digit growth in the furniture and electronics business in JD. So overall, very good performance over Easter. Let's talk about some of the individual businesses and start with PEP, our biggest business unit.
Total sales growth of 5.4%, and what was very encouraging is that came by virtue of growth of units in the basket as well as RSP inflation. So seeing increased unit activity within a transaction. Like-for-like sales of 4.1%, again, given market conditions and PEP maturity, we believe that's a reasonable performance. Those sales were definitely supported by the increased credit penetration that Rian referred to. Credit penetration moving from 3% to 7%, thanks to about 280,000 new accounts that were opened, and brought the customer a credit customer base to nearly 600,000 accounts. And that total sales performance meant that PEP gained market share on a 3-, 6-, and 12-month basis within RLC. From a cellular perspective, we continue to dominate the cellular market.
Hardware sales up 8% with just over 4 million units sold, 50% of those being smartphones. And we really believe that the strength of the cell phone business is, is being well supported by the FoneYam product that Pieter and Rian referred to, and that I'll give you a bit more detail, in the coming slides. In terms of PEP's ability to leverage their footprint, as well as their logistics capability, strong growth of 17% within PAXI, so more than 2.7 million parcels, flowed through the network during this period.
From a store opening perspective, a relatively conservative first six months, so 25 new stores opened across the various PEP formats, and that was offset by a number of closures in PEP Cell, primarily driven by nodes where we've suffered high losses or high levels of armed robbery. In terms of supply development, a very interesting development there. PEP invested in one of our local suppliers in the KwaZulu-Natal region, in baby wear. We've put in capacity to about 3 million units per annum on a dedicated or exclusive basis for PEP.
That was combined with a change in fabric sourcing into the SADC region, and both of those things have, have now meant that we have shifted a large portion of our baby sourcing from offshore into the local market, bringing shorter lead times, and with the improved base fabric, a much better product. And we saw the result of that with more than 300,000 units being sold in the first four weeks of the product being put into store. And then finally, that's just proof that the PEP brand, despite being more than 50 years old, continues to be incredibly relevant to the consumers in South Africa. PEP went on to beat a number of iconic South African brands to be adjudged the winner of the MMA Smarties Brand of the Year award during the first six months. Moving on to Ackermans.
The trajectory on Ackermans continues to improve. So we are very pleased to see total sales growth of 6.2%, with a like-for-like growth of 2.5%. But what is extremely encouraging is the near 660 basis point increase in full price sales, and that played out in an increase of gross margin of about 170 basis points, as Rian referred to. Clearly, we would like to have seen a stronger like-for-like than 2.5%, given the base that we came off. However, the Ackermans business certainly suffered extreme levels of port disruption at the late impact of winter in terms of the weather change, as well as underlying consumer behavior, meant that we were quite constrained.
In the final results of last year, I would just remind you that a large portion of the spend on the Ackermans card still remains in PEP, and that has no doubt moved share of wallet from Ackermans to PEP over the last six months. So we are encouraged by the trajectory change that we see. Clearly, we would like it to have been faster, but the interesting thing is that sales performance has seen Ackermans start to take market share again on a three-and-six-month basis, on baby and kids wear, and we feel that's very encouraging.
There was an increase in credit, so credit up at 19% of sales, thanks to about 260,000 additional accounts being opened, and that brings the Ackermans card base up to around about 2 million, 2 million members. From a store opening perspective, 16 new stores opened. Those were predominantly Ackermans stores, but we will see an increase in store openings going forward, as Pieter alluded to, as we reinvigorate the opening of Ackermans Connect stores, given the success of the FoneYam product that we've seen. Speaking of cell phones, about 1.3 million phones sold during the period, 80% of those smartphones. So you see a very different consumer mix in the cellular format within Ackermans, and we're encouraged by the performance of the cellular business.
From an assortment perspective, the Code range, the Cube range, which was implemented during the course of last year, aimed at the teens market, we continue to see very strong performance coming out of Cube, and as the team enhance that range more and more, we expect to see Ackermans' performance in older kids grow even further. Then again, as shared at the Capital Markets Day, during the six-month period, we made the decision to discontinue the Ackermans women's format. We believe that we are better served catering for the Ackermans women's customer in womenswear within the Ackermans format itself, so within the big box, alongside kids and baby wear. So we will be running that business down over the next six to nine months, and we'll close the business towards the end of January next year.
Forty of the stores will be transferred to the Speciality division, where we will launch a new womenswear format, and I will speak to that, speak to that shortly. So overall, as I said, very encouraged by the Ackermans trajectory. We certainly believe that, Adrian and the team are doing the right things. Market conditions just make it difficult to claw back market share at the moment. Moving on to Speciality, a headline sales growth of 8.5%, so very strong, with reasonable like for likes of 4.6%.
In summary, the Speciality Division can be described as follows: I think our apparel brands have shown very robust performance during the six months, and our dedicated footwear brands, being Tekkie Town and Shoe City, having a far more challenging period, and I'll speak a bit more to that shortly. Credit growth up by 200 basis points to 13% of sales, and that was primarily, Speciality being the beneficiary of the increase in the number of accounts opened in PEP and Ackermans, and the cross-shopping happening from those customers into Speciality, which is 100% in line with our strategy. That sales growth, like in PEP and Ackermans, meant that we gained market share in the Speciality Division as well, particularly on a 3-, 6-, and 12-month basis, and primarily in the adult wear categories of menswear and womenswear.
From a store opening perspective, we've reached the 900 store mark, opening 23 stores in the period, 13 of those being Refinery. As we mentioned at the end of last year, our plan is to double down our efforts on rolling out the Refinery format, given the performance that we've seen from that business over the last some number of years. Just a few points on the key individual brands. So Tekkie Town, as I said, had a tough, a tough six months, albeit they showed positive like for like during the period. And that's really, we continue to see the branded footwear market as highly promotional with high levels of competition, combined with the fact that a number of the tier one brands are moving more and more into a direct-to-consumer model. And really, the Tekkie Town business has been.
has been caught in the middle of all of those developments. The teams made some very good moves on the apparel side, so we did see some of the muted performance on footwear, offset by good and strong performance on apparel, including the introduction of our own Code brand into a number of Tekkie Town stores, and we'll continue to roll that out in the next six months. Dunns, a consistent high single-digit like-for-like, as we've seen over the last year to two years, and really, that team is starting to take our 200-store footprint and produce the kind of metrics and commercials that one would expect from a specialty division. So very encouraged by their performance. Very strong performance in womenswear and footwear, and again, showing market share, market share gains within Dunns.
Code, strong like for likes at 23%, and as I mentioned earlier, proving to be a very desirable brand, not only in Tekkie Town, but also, you know, in some of our Africa stores, which I'll talk to shortly. Refinery, again, consistent high single digit like for like growth, and very strong performance from the newly opened stores. So we remain confident in our accelerated rollout plan, and we are looking at launching some alternative formats under the Refinery brand, in new categories, as we believe this brand is really resonating with its, with its customer base. And then, as I mentioned, finally, we'll be launching a new womenswear format, towards Q2 of F25. The team is hard at work on the proposition. It will be aimed far more at a sort of mid to upper market segment.
It will be highly focused on core specific categories, which I'm not at liberty to disclose right now. But we really believe this will be a strong step forward in Pepkor's strategy to gain more and more market share in the womenswear, womenswear area. Moving on to PEP Africa. Superb performance from the team in PEP Africa. Nearly 23% total sales growth and like-for-likes of nearly 25%, with all territories trading exceptionally well, except Mozambique. Very pleasing to see the core market of Zambia at 27% growth, despite the fact there's been high, fairly high incidence of load shedding in the market. Malawi grew at 75%. That was a function of trading off a very low base from a stock perspective. Angola trading at 23%.
And all of those markets saw growth in transactions, growth in units, and growth in RSPs. So we're seeing the team respond incredibly well to the complexity of running a multi-currency business. Store footprint stayed flat at 228 stores. Again, our strategy here remains to optimize the existing footprint that we have and focus on product and category diversification and driving efficiencies within those stores. And as I mentioned earlier, one of the plans that was executed was the introduction of both Refinery and Code product into 44 test stores in Zambia. We saw very strong reaction from customers, a positive reaction, which proves that the PEP brand within Africa is not simply a discount brand. In many instances, it can be stretched, and we can cater for a wider, wider set of customers in those nodes.
And then finally, during the course of the first six months, we moved from what was ostensibly an in-country distribution center network to a central pick and pack facility in a bonded warehouse in Durban. The net result of that will be our ability to reduce costs within countries from a DC perspective, and clearly, centralizing our stock will mean far more efficient stock management and advantages in working capital. Then on to Avenida. Our accelerated expansion plan in Avenida continues to progress well. A total sales growth of 23.4%, but what was extremely encouraging was the like-for-like performance of 9.3%, which in the current Brazil market is market leading.
If you extract the sales of the discontinued cellular products from the base, that equates to more than a 13% like-for-like growth. The focus continues in driving in-store efficiencies and in-store profit contribution. So we lifted our trading densities by 9%. We lifted our units per FTE and sales per FTE by double digits, and we continue to try and flex that 163-store footprint as much as we can. The KVI process or the KVI strategy that I've spoken about before is now well entrenched in the business. 30% of our sales comes out of those KVI lines, which are bought in high volumes and are priced well below the market.
The underlying KVI performance delivered a total of nearly 50% volume growth, and at a total business level, 42% volume growth. So very encouraged by that. From a store expansion perspective, 22 stores opened in the period versus six last year, and our ambition remains to open well in excess of 14 stores during the balance of or for the full year this year. And in order to facilitate that expansion of our footprint, we've now moved on to six hubs across the country, and we'll be shortly opening our second DC facility in the northeast of the country, which will support our expansion corridors of the northeast and the north part of the business.
So from an Avenida perspective, again, delivering ahead of business case, and we, we really do see this as a big growth lever for us going forward. And then finally, on the furniture and electronics side, JD, as I mentioned, delivering 4.3% sales growth at a headline level, and like for like of 3.9%. Encouragingly, tech and home both growing positively. Home, slightly higher than tech because it came off a, came off a low base last year, and with particularly strong performances in areas such as large appliances, small appliances, cellular, lounge, and bedding. And in fact, we saw market share gains in a number of those key categories across home and tech, as measured by GfK.
As I mentioned, at the beginning of the presentation, what we do see within the JD Group is extremely high levels of promotional activity, both by traditional retail competitors, and some of the, the pure play online competitors. And customers are, are certainly focusing their spend around those, around those events, such as Black Friday, Christmas, back to school, and the, and the like. Very encouragingly, we saw, a significant growth, in our private label business. So we have two private labels, one in tech, and they are called Orion and Steel & Rose in our furniture business. Those private labels are exceptionally important to us in order for us to protect key price points across a number of different categories, and continue to help us to drive our margins up, as they grow.
And then finally, the brand refresh of Bradlows. We continue to roll that out. About 70% of the footprint has now been refreshed with a new look and feel within the store, as well as outside the store. And what we see is about a 400-500 basis point difference in performance in stores that have been refreshed versus those that haven't been refreshed. So that's essentially the traditional retail segment. If we move on to Fintech, again, a reminder that the Fintech division is equally about solving customers' problems. It's just not physical products that they require. It's more about connectivity and security and the like.
The Fintech area is really where we focus, not only about share of wallet, but about growing, growing our customers' wallets, so that we can both underpin the sale of product within the traditional, retail segment, and we can drive additional revenue streams, as you saw in Rian's presentation. Starting with the credit business or Tenacity, Rian shared these numbers of 550,000+ new accounts opened during the period. 2.5 million customers are now on our retail credit base, 277,000 of those in PEP and 260-odd thousand of those in Ackermans.
But what's really interesting is 27% of the 552 are new to credit in South Africa, so it's their first credit product, and 44% of the customers, it's their first retail credit product. And that really underpins what Pieter has referred to before, and that's the underlying desirability of the product within your retail offer that drives good credit behavior. So we're very pleased with the acquisition of those customers. On top of that, we continue to drive the interoperability strategy, and as I mentioned earlier, seeing a strong cross-shop between Ackermans and PEP and both of those into Speciality.
So the net result was credit sales up 43%, year-on-year, which as Rian mentioned, raised our group contribution from 10% to 13%, and most noticeable in PEP, where we increased from 3% to 7%. Again, as Rian mentioned, clearly, we're conscious of the environment we trade in, and there are a number of metrics there that should give you comfort that credit is being managed in a responsible, in a responsible way. The approval rate dropped by 500 basis points from 38% to 33%, which gives you an indication that we certainly are not loosening our credit scoring. In fact, to the contrary, we're tightening it up.
Credit limits were 10% lower year-on-year, and if you look at the customers in good standing and able to buy at 71%, that's still a very acceptable number. On the JD side of it, the Connect business, there we saw the account base stable at about 180,000 accounts, and the focus there was primarily on the use of technology and introduction of new technology in the collections area, as well as launching digital origination, so the ability for customers to self-serve and apply for credit online rather than through the store network. In terms of connectivity, which is really about the cellular business, Rian's already given you quite a lot of visibility on the total cellular business and the various revenue drivers.
You can see as a total group, we sold 5.6 million handsets during the period, and we continue to maintain that statistic of 7 out of 10 handsets being sold through a Pepkor store. Of those, 58% in total were smartphones, and we saw about 100 basis point improvement or increase in the contribution of smartphones versus feature phones, and we believe that is definitely impacted by FoneYam, which I'll allude to in a while. Going forward, the focus very much on our private label handsets. The demand by customers is definitely dominated by well-known brands such as Samsung, but as at the end of this trading period, private label within PEP and Ackermans, including the Motorola partnership, contributed 18% of total sales.
Clearly, that helps us in terms of ensuring the availability of handsets for customers. It enables us to set very keen entry price points for smartphones, and certainly carries a significant margin benefit over some of the branded handsets. In terms of SIM cards, nearly 20 million SIM cards into the market, about 75% of those through the Flash business.
And really, going forward, the focus of the this segment is around protecting our ongoing revenue and growing alternative revenue streams, through things like FoneYam, through the use of unique data bundles for customers on our base, in conjunction with some of the networks, and in the provision of Number for Life, which we will be launching shortly, and which really solves a material problem for a prepaid customer, where your ability to port your number or retain your number, should your phone be stolen, is a massive nightmare for them at the moment. And thanks to a partnership with one of the networks, we were able to simplify that for customers.
In terms of the FoneYam product itself, on cellular handsets, and again, just a reminder, what this product entails is it gives the customer the ability to buy a handset over a 12-month period, from a smartphone perspective. We have the ability to lock the device should the customer not pay. We have the ability to lock the SIM that is associated with that phone for the period of 12 months as well. So the net result is very high level of approval, very low levels of bad debt, and very low churn on the SIM. So that's the product. 202,000 active customers on a FoneYam product at the end of the H1 period.
By the end of May, we anticipate that'll be at 300,000, which lines up with the current run rate of opening about 80,000 or financing about 80,000 phones a month at the moment. That's fundamentally driven by the rollout across stores. The one complexity of this model is it is very service intense, so it requires either a dedicated canvasser in store or a dedicated colleague in store to conclude the sale with the customer. That means that rolling out is a little bit slower, and it, as Rian alluded to, the cost of acquisition is slightly higher given that model, and that's really what's constrained us up until now. So the focus going forward is twofold. Firstly, the current FoneYam product is limited to Samsung phones.
We will now be unlocking that across the other devices that we sell, and that we believe will increase volumes quite significantly. Secondly, in line with the JD business, looking at digital origination, so trying to solve the complexity of a canvasser model and an in-store model, giving a customer the ability to apply for this product online, and give them approval online. From an insurance perspective, excellent progress in the last six months in unlocking the opportunity to embed or bundle insurance via our own insurance license within Abacus across existing products. Net result of that was gross written premiums were up 39% year-on-year.
Around about 320,000 new policies were written during the period, bringing our policies in force to just over 650,000. And again, as Rian mentioned, that was really underpinned by the Capfin Credit Life product, where we now see a 95% take-up by customers and 87% of the Capfin book being covered by, by Credit Life. We also extended the insurance product into PAXI, and so all those 2.7 million parcels are now covered, with insurance cover via Abacus.
And the focus going forward will really be about extending the credit life offer on a number of the other credit books, and then about and focusing on using lead generation of the more than 20 million known Pepkor customers, to generate some standalone policies, and going forward to start looking at the informal market opportunities that exist, within insurance. Moving on to our customer value platform or our digital strategy. At the end of Q2, we were very excited to launch the much-awaited digital channel known as +more. And again, to remind you, in its infancy, what +more offers a customer is the ability to access exclusive deals across all of our 15 Pepkor retail brands. However, that, that proposition will be expanded going forward.
So as it stands right now, a customer can track their PAXI order on the +more app, for example, and we'll be extending things like Number for Life, the ability to do digital origination on credit, the ability to execute bill payments and, and ideally transact in VAS as we go forward. We've had a very strong response from customers, so literally within five-six weeks, 2.5 million customers now signed up. But what's really important is that 24 of those customers 24% of those customers were unknown to Pepkor before.
So we had no contact ability or no line of sight into that customer, and if we can continue to register customers at the current run rate, and maintain visibility of 25% as new customers, we believe there's a massive opportunity to start using this customer value platform and the +more data to drive sales and revenue streams across the business. And then finally, the informal market or the Flash business. I think the Flash performance continues to reflect the very high levels of activity in the informal market, and we spent a lot of time at our capital markets day talking through this. Net result was total throughput was at ZAR 23 billion for the six months. That's a nearly 28% increase year-on-year. Our trader business up 24%, our aggregation business up 43%.
That growth driven primarily by the sale of the 1V oucher product, which was up 36%, both through traders and aggregation, as well as an increase in the sale of airtime and data. As, as I think Rian mentioned, an increase in the sale of electricity, thanks to lower levels of load shedding, in quarter two. The trader base remains stable at 165,000 units, or 165,000 traders, but nearly 26% growth in the turnover or throughput per device. And that's a function of a number of new devices being deployed, as well as additional products now being offered, through the Flash device.
We also doubled the number of tap-to-pay devices that we have in the market, and that led to a doubling of the value, or tap value that went through the ecosystem in the first six months. From a cellular perspective, 15 million SIM cards issued, which was about flat year-on-year. But what was very encouraging was not only an improved activation ratio on those SIMs, but an increase in the base spend, and that should play out favorably in ongoing revenue going forward. So we remain and continue to be very excited about the opportunities in informal market, and the unique opportunity we have with Flash as an asset within Pepkor to unlock some of those opportunities. So that concludes the operational review. I'll now hand you back to Pieter, who will give you the forward-facing outlook.
Thank you.
Thank you very much, Sean, for that detailed feedback and as well as Rian, explaining the numbers. All that's left for me to do is summarize. First of all, this is sort of how we mark our own test. We think the revenue growth was good, given the macros. We would have liked to do better on like-for-like, specifically the areas that Sean highlighted. We're happy with the margin recovery, and we're very happy with the cost management that's going on in the businesses and also the strategic execution. We are very happy that we think we've got the right strategies in place, and as we explained at the capital market day, we're gonna be marked against that, and,
But at this stage, we think it's all the right strategies and are in place to give us the growth going forward. So in terms of the outlook, the macros are hard to call. We see the customers remaining constrained. There's an important election coming up in our home market, which certainly will impact sentiment depending on the results. But we're confident that, you know, we are positioned, well-positioned, as a group to serve our customers' needs, and that's ultimately what drives value for our shareholders. We're happy with the especially the Fintech and the Brazilian expansion. It does give us the ability to be less impacted by ports that don't work or maybe electricity constraints, so we have a better diversified opportunity over there.
Also, with the growth of the informal market, we think there's plenty of growth opportunities. So we're still positioning Pepkor, the investment case as robust, but also with good growth opportunities. We're certainly not shying away from the fact that we want to grow the business, and we see that going forward. So all for me to say now is we'll take some questions and divide it up between the three of us, and come back with answers to you. Thank you very much.
Okay, so a couple of questions that I'm gonna try and answer from my side. The first one is on the OpEx growth for the year. That's obviously higher than was expected. So the question is: Will some of those once-off costs continue into the second half of the year? So the first one, firstly, on the debtors cost, with the books still growing, the debtors cost will definitely be growing at the same rate than what you've seen in the first half of the year, and I'll come back to that question later on, on the books overall. So of the three once-off costs that you saw, the Forex, no, that will be low in the second half. Because of those exceptions that I mentioned, that it's specifically on the sale of some FECs, et cetera, we don't anticipate the
We're not planning for that to happen. Obviously, the lease modification, that we still have the 392 in last year, so b ut again, as we've explained in the past, the normal lease modification is coming down every year, as you would have seen. And then the last one, on the customer acquisition, yes, that will still continue. It will probably accelerate even further, because as with us opening still new accounts on A Plus and also with the new initiative, FoneYam, we do utilize a lot of canvassers to open those, those accounts. So that will continue in the second half. That leads into the second question: Do we still anticipate that the books will grow the same level in the second half, or will it level off?
So, yes, the answer is we do anticipate it's still gonna grow at the same rate, even it will continue into the next financial year as well. Probably, the only change that you will see is that, FoneYam will start to grow faster, and A+, in the second year, will start to slow down, but overall, the two will grow at the same rate that you've seen this year. Then there was a third question, also relating to credit. The question was asked: With the growth in credit in PEP, do we anticipate that, the margin or the GP margin in PEP needs to increase? So, no. We do run the book as a completely standalone entities. The operating companies don't get involved in A+.
The capital gets allocated from my side, so we decide how quickly or slow we wanna run the book, and the principle is always we still want to make a profit in all the books, just a smaller profit than what we normally make in a book like Capfin, which is a standalone product, which we do make profits or anticipate to make profits in all the books. Then there was a last question around the growth in Avenida. Do we anticipate raising capital on that side? So no, the answer is again, if you remember correctly, when we initially acquired Avenida, we invested working capital from this side. At that stage, the plan was to open 20 stores a year.
When we made the call that we want to accelerate that opening to 50 stores a year, we again decided to rather invest capital from South Africa. And as you can remember, I communicated last year, we decided to invest a further ZAR 1 billion, of which ZAR 500 million was already invested at the end of our last year, and the second ZAR 500 million will happen around June, July this year to fund the acceleration of that growth. Okay, I'll hand over to Sean now to answer some of the other questions.
Thanks, Rian. Two questions. First question was around PEP and Ackermans' trading in April and May. April still saw positive growth. A little bit of an impact of the movement of Easter, clearly from April last year into March this year, which constrained growth slightly, and then the effects of the port delays being felt, but we still saw positive growth in both those businesses in April. May has proven to be a very challenging month so far. Our records show us that in terms of average temperatures and minimum temperatures, literally the one of the highest Mays in recent decade. So, a little bit more constrained in May, although towards the end of the month, we have seen an improvement.
And then the second question was just around why, less PEP stores were opened in H1. It was really a combination of two things. The first being a slightly more conservative approach on the PEP Cell, format. We mentioned that we had closed some stores due to, some nodes being quite challenged from a robbery perspective, so we've been slightly more conservative on PEP Cell. And then on the PEP Core brand, most of the delay has come by virtue of landlord delays. Some developments have been delayed because some of our competitors have pulled back or frozen store openings, which has resulted in those developments taking longer to land. So not really a pullback from our side, more related to the delays in the developments.
Right, I'll hand you back to Pieter. Thank you.
Thank you, Sean. I've been allocated two questions here by the team that I'll deal with. The first one is a question about expansion into South America and Africa, what our plans are on that. So with the success in Brazil, we actually putting a lot of resources behind that format and expanding. We've doubled the number of stores that we're opening this year compared to last year, and we're building capacity to keep on doing that. But we have retained a team to look at the rest of South America. We sort of recognize that we, o ur skills are in the emerging markets, and the incubation period for these projects are quite long.
So we've already looking at other countries, but in the near future, our energies will be put to Brazil and the expansion there. It's a big country, it's a big market, and our capacity to deal with more than one country is not there at the moment, so we will keep on building that. But as I said, it's a long process, and maybe in a couple of years, we will look at other countries in South America to enter that. These things are sometimes opportunistic, and we are already being contacted by businesses in the region who sort of noted our early successes in Brazil, but we'll keep the market informed. No immediate plans to go outside of Brazil.
There was also a question whether we want to expand in Africa, and I think we've communicated to the market. At the moment, we see the rest of Africa is outside of the SADC Customs Union, not a market that we wanna grow aggressively, because we are looking for efficiency. We've actually, as you've seen in the presentation, we've actually got a better stock allocation proposition now by being able to allocate from South Africa, and we'll see how that goes. But at the moment, there are no plans to go into new territories in Africa. And as you can remember, we actually reversed out of Nigeria a while ago, which, given all the currency and other problems there, seemed to have been the right decision. Then I had a question about.
We had a question about whether Pepkor will consider buying back shares from Ibex, and whether we'll be able to do it. So two things on that. I mean, we haven't had a strategy in the past to buy back any shares other than to minimize the dilution effect for the share incentive schemes for the executive team. But that doesn't mean we won't buy shares back. I mean, if it makes sense for all shareholders, we will do that. But whereas it comes to buy from Ibex, that is obviously a related party and will require a lot more resolutions and decisions from shareholders. So that's probably not executable at this stage, and so neither do we have plans for that. So we don't have a specific share buyback proposition at the moment that we're considering.
So those are the two questions. I'll, b efore I close off, I understand somebody's been standing on the cable, and, and that the, was interrupted. The broadcast was a bit interrupted, so just to remind you, the recording will be available on the, on the website, as, as soon. So thank you very much for your attention. See you soon.