Good morning and welcome to the Pepkor Holdings annual results presentation for the financial year ended 30 September 2024. You'll see a bit of different graphics this year, which will become clear to you later in the presentation. As per usual, I'll just give an overview of the results before Riaan will unpack the financial performance and the differences between the IFRS and the real world. Sean will talk about what we implement in the different operating entities and also on our investment cases, and then I will have a quick update on the outlook and how we see current trading happening, and then we'll take some questions. The summary of the year, you'll see what we would describe as a credible performance: revenue up by 9.2%, but operating profit really very pleasing, 17.4% on an annualized basis, and Riaan again will reconcile that for you.
Headline earnings as per guidance to the market at ZAR 1.402. We're keeping the dividend policy the same with a three times cover. And this is despite, as we discussed at our half-year presentations, quite a late winter, a big improvement after winter came, a bit of disruptions in the supply chain, especially in the first half of this results, but a big improvement of that. And really a good performance from all the businesses. Sean will explain significant gains in market shares, good improvement in margins, and our fintech division especially performing almost above expectations, as we've explained to the capital markets today. So just a few other highlights, maybe not that we don't always talk about. Firstly, in the bottom right, we spoke about our M&A strategy. The Building Company was disposed of and payment received just before year-end.
Something that we haven't discussed before with the market is the acquisition of Choice Clothing, which has just been signed just before year-end. Sean will talk more about that and what our strategy is around it. It's a fairly small acquisition, but with huge potential. We have given the OK Furniture acquisition details to the market. As far as we know, that's all on track in terms of all the competition authorities and all the other legalese that we have to comply with. Roughly around about mid next calendar year is our expectation. In terms of our normal Building Better Business, we still want to highlight a few non-financial highlights. We've added quite a few accounts, as you can see there, 1.2 million A+ accounts driven by interoperability.
Our phone rental product has really exceeded our own expectations, the so-called Foneyam, and we've added a million new customers. We've also added a million new insurance customers on our Abacus division. Some other interesting stats, we are still training people to work in our business on our stores, almost four and a half thousand new learnerships that we provided this year. On the more ESG stuff, we continue to put in solar. We then have been included into the FTSE/JSE Responsible Investment Index. We've concluded the A2X listing. Just recently, in the last month, we've been included in the top 40 index on the JSE for the first time. This will be my last slide before I hand over to Riaan. Really, we spoke at our capital markets today how we set up the business.
We do all the difficult stuff in stores. We call it the traditional retail core. But we have really doubled our financial services contribution, as you see there from FY22 to FY24, 4%-8%. And then we're still growing in the informal market largely through our Flash footprint. So I'll now hand over to Riaan to take you through the financial performance.
Thanks, Pieter. Morning, everyone. As Pieter said, I'll take you through the results for the 12th month ending 30 September. From an overall perspective, Pieter also mentioned it, just to understand most of the results I'm going to talk about. I'm going to talk about normalized and comparable results. So normalized, for those who can remember, last year we had the once-off lease modification with the move of the Pep DC from Fibres Road to Hammarsdale. That was a ZAR 392 million impact. So we see that as a once-off item. So when we talk about normalized, we have excluded that from the results. And comparable, last year we had the extra week, the 53rd week in our clothing and general merchandise segment. So we also exclude that to get comparable results. To start off with, from a statutory perspective, the revenue growth was 7.8% up to ZAR 85.1 billion.
But as I said, if you exclude that extra week, that takes us up to a more commendable 9.2%. I'll elaborate a bit more on that later. Gross profit, very pleased to announce. Last year, we had an improvement in gross profit for financial services, but that was offset by the drop in the retail GP. This year, very successful. We've had an improvement in both in the retail GP and also in the financial services retail, mostly driven by Ackermans and financial services really across the board. I'll unpack that a bit more in detail later. On the operating profit, from a statutory perspective, 8.4% increase to almost ZAR 10 million from a comparable and normalized to 17.4.
I'll show you the growth in cost of doing business expenses later, but very well controlled, again, by all the divisions, which resulted in that we have that gap between gross profit and expenses, which gives us the 17.4%. Just another item to take note of, other income was down this year, but that's because of the insurance income we still received in the previous financial year from the flooding. If you take that insurance income out, we achieved a 14% growth in other income for the year. So to confirm, operating profit because of good leverage up to 17.4% against up above our internal hurdle that I communicated in the past of 15%. HEPS growth on a statutory basis, flat, but again, on a normalized and comparable basis, up by 10.3%.
So it is lower than the operating profit due to the fact that financing costs because of higher interest rates this year compared to the previous year was up. And also, for those who can remember, last year we had the settlement with SARS, which meant that our effective tax rate was lower in the previous year than this year. Our effective tax rate was still below the 27% this year. Of course, as you would have seen in the first six months, we still had some further settlements with SARS that resulted in us releasing the provision further. So very happy with the ZAR 1.402 HEPS. I'll elaborate and unpack that a bit further. Also, again, very good cash generation, almost ZAR 12 billion. Cash conversion slightly below our normal expectation. I'll unpack that.
But taking into account the growth in the books and investment in inventory we've made, very happy that we could still generate close to ZAR 12 billion for the year. Return on net assets also slightly down compared to maybe last year, again, in line with expectation because of the investment in the books and the fact that we load the provisions upfront and only see the return on that investment really in year three and onwards. So again, in line with expectation, but still a very good number. Just to again unpack the HEPS number in a bit more detail, just to refresh your memory. So last year, we ended up ZAR 1.408. We have the once-off lease modification that amounted to 392 after tax 286, which results in a ZAR 0.078 impact.
The extra week last year from an overall profit perspective gives us a ZAR 0.059 benefit in the previous year. So that means if you eliminate those two, the normalized and comparable number for last year was ZAR 1.27-ZAR 1.402. As Pieter mentioned earlier, general market consensus was around ZAR 1.389. So very happy to say that we have exceeded that number and ended up with a growth of the 10.3%. If we just look again at the segments, so obviously with the sale of the Building Company, we're now down to three segments. In the past, we had four segments. Two of those segments still fall in under the retail side, the clothing and general merchandise, and then the furniture and appliance side, which is really your lifestyle business. Previously, the JD business, we now call it the lifestyle business.
And then on the fintech, we've also started separating the fintech between financial services. And we historically always used to call it an informal market, which is really Flash, just more tech business. And that's just because of the growth that we've seen in these two businesses. And long term, the view is that at some stage, we'll probably both split them into separate segments if the growth continues the way it is to give you further disclosure, because we do definitely think from a tech perspective, Flash is currently undervalued and should really be seen at a higher PE to really unlock the true value of that business and to a lesser extent, the financial services itself as well. So overall, you've seen operating profit coming from the clothing and general merchandise is now at 79%.
It used to be at 85% still a year ago, just again emphasizing the impact where the fintech segment is now 14% overall, where it used to be around 10%, 11%. So already making a huge impact during the current financial year. Revenue, as I said, on a comparable basis, up by 9.2%, up to 85.1. In the past, I've communicated our target is always at least a 10% revenue like-for-like growth where you like to see between five and six. We did fall short of that by growing 4.1%, the like-for-like sales across the different retail businesses, mainly due to the shortage in availability due to the port congestion and supply chain challenges we had in the first six months. We'll unpack that a bit more. Also, we did open less stores this year compared to last year. So normally, our space growth is between 3% and 4%.
This year, it was only 2% due to opening fewer stores, but also closing more stores, specifically in the lifestyle business and also in the specialty business where stores weren't as profitable and we opened more profitable stores. The fortunate thing is we did pick up a bit more growth in the financial service or the fintech segment, as I mentioned. They really grew by 3%. We normally would grow by 2%, giving us the overall growth of 9.2%, just falling short of the 10% we would like to see. The growth in credit with the interoperability with A+ has continued. If you remember correctly, after the six-month result, we were sitting at 12%. Last year, it was 10%. So it's now up to 14% with Ackermans at about 20% of sales on credit, Pep now about 9% and specialty 13%.
So a 34% growth in credit overall, as I said, due to the growth in A+ because of interoperability and cash out by 2%. The key message for us is even with that growth, we still see ourselves as a cash business with 80% of the sales still on cash, but we do offer the credit to assist our customer. So from a segmental perspective, 7% revenue growth in the clothing and general merchandise, 6.8% in sales. Difference between those two is purely ongoing revenue that we include in revenue in the segment versus the sales of 6.8% and like-for-like at 4.2% overall in the segment, mostly driven by Pep and Ackermans at a higher rate. And also Avenida coming in was likely, unfortunately, Speciality coming in lower rate.
So if you look at where does that come from, different breakdown, Pep and Ackermans still your two biggest businesses with good growth, but as we said earlier, really impacting the first half by the supply chain issues, as is generally publicized, although both of them, especially Ackermans, had a much better second half. Pep Africa operations performing very well, but unfortunately, the currency has worked against them with all the African currency weakening and the rand strengthening. So on a rand basis, they're unfortunately down. Avenida still showing good growth with a 20% growth overall. And in rand terms, that's more or less at the same level. Speciality up by 8.1%, mainly driven by Refinery and Dunns. Unfortunately, Tekkie Town and not having a good year overall. So on the furniture appliances side or the lifestyle business, still a very good 4.5% on a very difficult circumstances.
That was mostly driven by the home side or the furniture side, which showed very good growth. Tech was a bit more under pressure, so like-for-like overall, 3.6%. Again, as I said, mostly driven by the home. And on a net basis, we did still open more stores in lifestyle than what we closed, so the overall sales growth, 4.3%, taking it up to ZAR 11 billion.
Then the star performer for this year, really the fintech segment, as you would have already seen, so almost 27% growth in revenue, up to ZAR 12.7 billion. Very happy to say that this year in Flash, we had a 20% revenue growth. If you remember correctly, last couple of years, that growth was lower because of a change in sales mix. Sales mix, that's now stabilized. So 63% of the revenue in the segments coming from Flash. This used to be historically 80%.
Already slightly down, but it's purely driven not by Flash performing badly, but by the financial services products, specifically A+, insurance, and also Foneyam delivering phenomenal results, taking this now up to 37%. If you unpack that a bit further, where specifically did that growth come from? As I said, from the A+ side with the interoperability. I've mentioned that we've seen a higher sales contribution in Pep, Ackermans, and Speciality from the A+ card. Also very good growth in Capfin because we're advancing more 12- and 24-month products. Then Foneyam, last year being no sales from Foneyam going to a 10% basically in a 12-month period. That's really exceeded our expectations as Pieter has already mentioned. Then on the Abacus side, a 25% growth. This is we still see lots of potential.
I'll pack that a bit more later on insurance as we communicate it. We've only really started this year with adding some further products on Funeral, Foneyam, etc. So lots of growth potential still in that area. So on the gross profit side, as I mentioned earlier, very good growth in gross profit. Some of it is just the recovery that we've seen last year in retail GP. Now up to 38.3% by 190 basis points. You'll remember after six months, it was up to 38.1%. So we've seen a further improvement in the second half of the year. If I unpack that a bit more detail, really coming from the clothing and general merchandise side, specifically Ackermans and to a lesser extent Pep, assisting with that growth. Ackermans purely because of full-price merchandise sales. Last year, we had lots of markdowns.
Pep in the first half, as I communicated previously, also similar in the previous six months, they had higher markdowns. Pep also had a once-off benefit of coming in at lower rate than the costing rate they used for containers in the first six months, which was also previously communicated. Again, just to remind you, we don't change the inflow GP on Pep and Ackermans on an annual basis. It goes consistent year in, year out. The only difference you'll have there is more discounting and markdowns. That's what we've seen to this year, getting back to more normalized levels and specifically Ackermans. Unfortunately, Avenida was slightly down on GP and similarly on the specialty side, but overall 218 basis points up. The lifestyle segment slightly down. That's again on the tech side with more competitors entering the market at home at exactly the same level.
And we've seen, as I mentioned, very good growth on the home side to assist in that. Fintech, again, up now to 48% GP in fintech, an increase of 129 basis points. As I mentioned, both of them assisted this year in increasing that overall GP. And a lot of that is coming again from the opening of the new accounts, the high interest rates, but also from the insurance side and from Foneyam side, it is a GP. Remember, Foneyam is a rental product. It's not a finance product. So we make a GP there. We don't earn interest. So all of that really assisted. From an overall cost of doing business, I mentioned with low sales growth this year with a difficult market, the teams really did phenomenal well to control their cost and the expenses and the cost of doing business.
You'll see there on a comparable basis, last year, the statutory number was 26.8%, but again, if you eliminate the extra week and the once-off lease modification, 27.1%. Cost of doing business was at 27.5% this year. So very little movement even with sales under pressure, and specifically Pep and the lifestyle business stands out here with very good cost control during the year. So overall, if you eliminate debtors cost, depreciation, and forex, the expense growth is 8.4%. If you take out Avenida, because the currency still worked against us slightly there, and they have got high expense growth because of the number of stores that they opened, 42 stores, the expense growth is 7.1%. But most important for us, the two biggest expense categories very well controlled. Salary costs, excluding Avenida and including new stores, growing only by 6.7%.
Property costs, including Avenida and including new stores, up by only 4.4%. We still saw on renewals a rental reduction this year of 1%, which is very pleasing. We were expecting to already see an increase in lease renewals on rental costs. Very good. Just one thing to take note of, unlike most of the food retailers, we didn't have a big diesel cost in the previous year. It didn't have such a big impact on us. But what we have seen is with load shedding now, something hopefully of the past, we have seen a very sharp increase in electricity costs, really to cancel out that diesel cost we used to have in the past. No real benefit on that. This all comes together, as I said, in the operating profit.
On a normalized and comparable, the 17.4 that I showed you up to almost ZAR 10 billion. Where did it really come from? 12% growth from clothing and general merchandise side, mostly driven by the recovery of Ackermans. Ackermans showing a 24% growth in operating profit. Pep also assisting with that number. As I mentioned earlier on the lifestyle segment or the furniture segment, a growth of 22.2%. That's again because of very good expense control, but also closing unprofitable stores and opening more profitable stores has meant that they saw a significant increase in profitability. Again, the majority of the operating profit coming from the fintech segment, 27% top line growth, 55% operating profit with the pure financial service, including Flash, growing by 71%. Flash really having a phenomenal year this year with a profit growth of 38%.
Again, you'll remember two years ago in this segment, 60% of the profits used to come from Flash. It's now 43%. And that's again just because of the phenomenal growth that we've seen in the financial service side with Capfin really doing very well and A+ also normalizing and starting to show very nice profit growth. So how does this play out in the operating profit margin? As I've always said, we believe this business needs to run at a minimum of a 12% operating margin, getting closer to that. As I always said, it will take us another year to fully get back to that. But we've already seen a very nice 80 basis points improvement this year. Again, where did that come from? Clothing and general merchandise, 60 basis points up to 12.6%. Again, mainly driven by Ackermans, less extent by Pep.
There was unfortunately also some head office investment that we had to make with the Plus More program that dropped that number slightly, but even taking that into account, very nice to see it up to 12.6%, although that number should really go up to at least 14%, and because of the fantastic profit growth we've seen in the furniture or the lifestyle business, they're up to 5.9%. We always said somewhere between 5% and 6% is what we think that business needs to run at. To get that at a higher level is the reason why we've looked at buying the OK Furniture because we see due to those synergies as we communicated. We think that can go up to closer to a 7% OP and maybe even an 8%.
And then fantastic increase in the fintech operating margin, 200 basis points up, as I mentioned, really driven by the improvement in A+ and by Capfin, specifically being the two top performers in the segment. If we break it down a bit further into the different companies, I said Pep did show an improvement in the OP. Ackermans showed a phenomenal improvement of 240 basis points, but it's not at the level that we wanted to be yet. The first six months' sales and the challenge around the board really had an impact on the overall profitability. In our plans last year, we already expected it to be at a higher OP percentage and show a bigger growth.
Hence the reason why you would have seen the impairment that we had to do on the goodwill for the clothing and general merchandise cash generating unit, really down to Ackermans, not yet being at the level that we wanted to be and probably going to take another year for it to get above the 15%. On the specialty side, unfortunately, Tekkie Town and Shoe City didn't perform well. That's the reason why that overall OP margin is down. Also the reason why we had to do the impairment on Tekkie Town and intangibles and why Shoe City also contributed to the impairment on the clothing and general merchandise cash generating unit. On the specialty side, good to say at least the Refinery business and the Dunns business have improved their operating profit margin to offset that drop by Tekkie Town. Africa slightly down in constant currency.
The OP margin is actually up, but because of the weakening of those currencies, as I mentioned, unfortunately that number dropped. But as we said in the past, that's why we run it at a much higher OP percentage to compensate for events like this. And Avenida is still at the 5% where we originally acquired them. We always said long-term we'll need scale to get it closer to a 10% this year with the slight drop in GP, but also because of further investments in labor, opening additional DC, additional investment in systems. That meant that on a net basis, we had to keep it at the 5%. And as I mentioned earlier, lifestyle really having a fantastic year and improving their OP margin slightly.
On the fintech side, firstly on the Flash side, historically we've always said between a 5% and 6% OP margin is what we want to achieve. Very pleased to say that we are now ready at a 7.7%. And that's purely driven by efficiencies in the system, not really by cost cutting. GP is still at the same level. And then financial services, significant improvement, as I said, due to A+ insurance and also Capfin showing very good improvement in their OP margin.
So specifically on insurance is something we spoke about quite a bit on the capital markets day. So just to unpack it a little bit further, what do we, what profit do we generate from insurance? The pure EBIT that Abacus make at the moment was ZAR 92 million this year. But there's also IP and royalty fees that get paid to the other divisions to compensate them.
You really need to look at those two together to see the true profitability because in the past, those IP and royalty fees, those businesses used to get from outside parties, from other insurance providers. Now it's all in-house. Hence the reason why we show it now together to compare it to previously when it was outside of the group. A phenomenal number to go up to ZAR 254 million. That's the number we expect to go up to ZAR 1 billion in three years' time. Further to take note of, there's a further ZAR 71 million in support that Abacus provide to the division. That's in the case of claims on product losses that claims get paid out to lifestyle or on the Capfin side where debts get written off.
Again, that assists the whole group to keep, maintain its profitability and not incur those losses. You'll see the majority of the profit still generated or the IP fee still in the Lifestyle because of the historical Connect. But we do anticipate with some of the new financial products, Foneyam products, etc., etc., that the contribution from clothing and general merchandise and also from the fintech side will increase exponentially in the next couple of years. Cellular, a lot of discussion on that in the past. Very pleased to say that very good growth on handset sales. Again, this year showing 15% driven by more smartphones and also the Foneyam product.
We were concerned that ongoing revenue, because of the entering into a new contract with one new long-term contract with one of the service providers, would be negative this year, but still a 4.2% growth resulting in GP up by 11. Expense line, I did not show there, but expense line is growing at a lower rate, mainly due to better transport costs and also with the locking of devices, etc. We've seen fewer burglaries and the cost of running this operation going down. Long term, we do see that 10.5% operating profit improving even further. Currently, 23% of the total profits of the group come from cellular, being the ZAR 2.3 billion profit on a fully costed basis. Credit books, same trend as was showed in the first six months. A+ because of interoperability went from 4.5-6.6.
Very pleased to say that non-performing loans are still at the same level. We were historically concerned about it. So we did have a higher provision because if it's still sitting at the same level, we were able to drop that provision. Similarly, on the Connect side, we always historically had a higher provision. But again, with very good performance there, we were able to bring that down slightly. And then on the Avenida side with the new store openings, etc., although non-performing loans have gone down, we decided to keep the provision on the same level to compensate for the opening of the new stores and new customers that we have there. Then I've spoke a lot about the Capfin book. Very pleased to say because we give now 12- and 24-month products to our very good customers.
That book has grown from ZAR 2.5 billion to ZAR 3.3 billion, still get a very good return. And because it's only the good customers that we extend, we've seen our non-performing loans coming down. And that's resulted in a similar drop in that provision. Then the new product, the rental product book, still early days. It has exceeded our expectation from an overall size, almost ZAR 1 billion already. Still early days to determine exactly what the final provision level needs to be. But at this stage, our indication around 20% is where we're comfortable. Obviously, this has resulted in an increase again in bad debt provision, almost up by 50%. Most of that driven again by the increase in the provisions because of IFRS 9. You have to load your provision up front. You'll see that's up by 58%.
That's even taking into account that we are still following a very conservative credit granting approvals, again down from 36% to 30%. So we're still maintaining a very conservative approach on the opening of new accounts. On the net debt level, slightly down on last year. Even with the growth in books, we were able to maintain our net debt level assisted by the payment we received just before year-end on the building company. And we again this year refinanced some of our debts with better bonds at much better rates. So we're again well within our internal target of a 0.5 to 1 time net debt to EBITDA at 0.7. So very comfortable with the debt levels.
As I mentioned earlier, although the debt level was at the same level as last year on average throughout the year, because of interest rates being higher this year compared to last year, it did mean we had to pay 16.3% more in interest. Finance costs overall went up by 16.3%, resulting again in why your HEPS growth is lower than your OP growth. Specifically on inventory, we did also, besides from the books, we've invested more in inventory level because of the concern we had in the first six months around port congestion, etc., not losing out on sales in the first six months. So we've invested specifically in Pep and Ackermans. You'll see there we've buffered a bit more stock instead of the lead times. And also you'll see an increase in goods in transit specifically.
The other area that we focused on upping our stock levels on the cellular side because of the very good sales we've seen in cellular, specifically on smartphones, and also with the growth we've seen in Foneyam, that has paid off results that we now source some of the products directly from the manufacturers, so that's assisted us. That's really helped us throughout the year, and the higher stock levels have also helped us with sales during October and November, as you would see. Overall cash generation or cash conversion is very close to our target of 80%. The higher increase in inventory was offset mostly by trade payables, but as I said, we did decide to buffer or include more buffer stock, so it means that our stock did grow higher than the trade payables.
But then with the investment in A+, Foneyam and Capfin, that's the majority of where the cash investment went. So still very happy to say that we could generate ZAR 12 billion and a 79% cash conversion. So on the returns, I mentioned at the beginning, it is slightly down. It is in line with expectations. We also saw that in 2019 when we did build the Capfin and the Connect book. And in this case, we're now in the process of building the A+ book and the Foneyam or growing it faster. Foneyam we're building. A+, we're just growing faster because of interoperability. So that's very much in line with expectation. We have seen that A+ is sort of equalizing. So we do expect that to improve. And remember again, Foneyam is just a 12-month product.
So we should already see an improvement next year back to at least a 25%, so overall on capital allocation, as I guided during the year, we expected about 3% of revenue to invest in CapEx. We fell just short of that because a few stores opened. We expect to be again at the 2.9% level again because of the additional stores we're going to open, but also further IT investment specifically in the fintech side with the growth that we do anticipate there that we've already seen. Still growth in the cellular book, in the Foneyam book. We further capital invested. And then although we do see the A+ book slowing down in the new year, we still anticipate that it will still grow in the new financial year. Pieter already mentioned some of the activity that we've had.
So we've disposed of The Building Company, the ZAR 1.2 billion proceeds we've received. We've entered into agreement with Shoprite on OK Furniture. We hope that deal will be concluded around June. And then we've made a small acquisition Choice Clothing. As he mentioned, we're continuously looking at M&A opportunities and other investment opportunities. So based on these investment criteria and capital required, we decided it's prudent to keep our dividend policy at a three-times earnings cover. Although, as we did last year, we did take out the one-off impairment that we had this year of ZAR 2.8 billion. So overall dividend of ZAR 0.485 compared to last year's ZAR 0.481. So I'll thank you. I'll then hand over to Sean to take you through the strategic implementation. Thank you very much.
Thank you, Riaan. Good morning, everybody.
As Pieter said, I'll take you through more of an operational update and give you some color behind some of the strategic implementation. This year, a slight change. I won't be covering every single business unit in detail. We'll focus on the business units that have a large impact on group performance, as well as the ones that have more of a strategic significance in terms of the plans we've shared previously. I'll basically give you an update across four main strategic focus areas, those being traditional retail, financial services and connectivity, omnichannel, and the informal market. So if we start with traditional retail, and again, a reminder, there's essentially two divisions here, the first one being clothing, footwear, and general merchandise, which includes home decorative products, and then the lifestyle division, which is furniture and technology, the artist previously known as JD.
Looking at the actual retail numbers, before we go into the specifics, I think there's two big external factors that are worth mentioning that had an impact on both our total sales and our like-for-like sales. The first is the well-publicized stock delays that we've seen not only from port disruptions in South Africa and particularly Durban, but from the lack of container availability in China and in some of our other source countries, and the net effect of that was a severe impact on availability of winter product in the early parts of winter, as well as on our replenishment and non-seasonal products, particularly in the Pep business, and that certainly impacted our sales.
And the second, as has been mentioned, the number of new stores was affected by the fact that there were a number of new developments that were pushed out, retail developments that developers had to push out as some of our competitors recut their space. With that being said, from a sales perspective, 6.4% total sales growth across the total retail division with an underlying like-for-like of 4.1%. The clothing, general merchandise, homewares area growing at 6.8% with like-for-likes of just over 4%. Pep performing very well at 6% and 4.7% like-for-like. Ackermans total growth of 6.8% and 4.5% like-for-like. Speciality growing at 8.1%, like-for-like slightly softer at 3.6%. Pep Africa, as Riaan mentioned, very strong performance, 22.5% top line like-for-like at constant currency and 19.7% like-for-like sales growth. And then Avenida, again in constant currency, growing total sales at 20.1% and like-for-likes at 5.5%.
And then finally, the Pepkor Lifestyle division growing total sales at 4.3% and at 3.6% like-for-like. But I will unpack these in later slides. In terms of store openings, 256 gross store openings, 200 of those happening in the CGM area and basically all of the brands contributing to that. So Pep with 58 stores, Ackermans at 37, Speciality at 61, and Avenida at 42. And then the lifestyle division opening 54 stores, and I'll unpack some of the detail behind that. But when you look at those sales performances, and I think as both Pieter and Riaan mentioned, we saw a very strong H2 performance and a stronger performance in Pep and in Ackermans in H2. And that was really a function of as the weather changed and winter started, combined with the fact that stock availability then improved from H2 onwards.
You can see from the graph that Pep had like-for-like sales of 5.3% in H2. Ackermans had a very credible 6.7% and Pepkor Speciality at 2.3%. When you put that up against a comparative against six of our competitors, you'll see that four out of six of our competitors in the same period reported quite significant negative like-for-likes and two of them only marginally positive like-for-likes. What's more encouraging is if we take a view of total sales growth since the close of our financial year end, so that's in the seven weeks to the 16th of November, you see a dramatic shift in sales performance. Pep at 19.3% total sales growth, Ackermans at 12.4%, Pepkor Speciality at 13.4%, Pepkor Lifestyle at 5.8%, and the home division within Pepkor Lifestyle growing at 11.5%. Clearly a change in consumer spending patterns.
There are a number of things that have changed over the last six to eight weeks. We've seen food inflation numbers reported as being lower. We know interest rate adjustments keep coming down. We know that the implementation of full duty on SHEIN and Temu products commenced from the 1st of November. But most significantly, we know that the implementation of the two-pot system took place from September onwards. We believe this has had a massive impact on our sales. If you take something like the Pep growth, that 19.3% growth is fundamentally driven by our sales per customer or average transaction value, which tells us it's not a bunch of new customers in our stores. It's the same customers, but they just have far more disposable income than they did at the same time last year. And we really believe that's a function of the two-pot system.
All of that sales performance meant that when we get to market share, Pepkor basically had a full house. When it comes to market share gains, we gained share across the total CFH division, babies, kids, school, adults, and Pep Homes. So all of our big categories gained market share on a 12-month moving average as measured by RLC. And then looking at prepaid cellular handsets, more than 300 basis point improvement in handset market share off an already incredibly high base. And if we look at some of the numbers down the right-hand side of the slide, again, just cementing the significance of Pepkor brands in South African consumers' lives, two-thirds of total baby wear sales go through a Pepkor store, 50% of all kids wear sales happen in a Pepkor store, three out of four school wear sales happen in a Pepkor store.
Just a reminder, those are RLC measures, so they measure value. Considering the average price points of our businesses, I would suggest that our market share in units is significantly higher than that. When it comes to cellular in unit terms, seven and a half out of ten prepaid handsets going through a Pepkor store. Again, a very, very credible performance from all of the operating companies within the traditional retail division. Moving on to the individual business units, starting with Pep, as Riaan shared, by far the biggest contributor both in sales and in profitability. New stores opened, 58 new stores. We've already spoken about the fact that this was below budget by about 30 stores. 38 of the 58 were Pep Home stores. We continue to roll this format out as it resonates very, very strongly with our customers.
One of the things that the teams did when they saw that the new store openings were behind plan, we redeployed some of that capital into revamps and refurbished 43 of our Pep stores and saw very nice sales uplifts where this was done. A reminder again, Pep's like-for-like sales was 4.7%. But I think what is more significant is that sales growth was achieved with a 410 basis point improvement in full price sales while still protecting the best price leadership positioning of 96%. So Pep were able to convert very profitable sales and drive a full price sales improvement while still maintaining their best in market price positioning. The result of all that was market share gains across a three, six, and 12-month basis for the Pep business.
There's no question that the increased to 9% credit mix that Riaan referred to would have assisted their sales as well. It's worth mentioning that 30% of the spend on an Ackermans card now happens in a Pep store. Pep has definitely benefited from the group's interoperability strategy that was implemented some years back. We sold 8 million handsets through our various Pep formats, 53% of those being smartphones, slightly higher mix in smartphones year on year. That was fundamentally driven by the Foneyam handset rental product, which I'll talk about later. Cost of doing business exceptionally well controlled, strong efficiency gains through our stores, and real frugality when it came to central costs and spending at the center.
Then in terms of PAXI, just evidence that this business unit continues to serve the needs of the nation more and more, 16% increase in the number of parcels through the network to a total of 5.7 million parcels during F24. Overall, a really consistent and really strong performance from our biggest business unit. Staying on the subject of Pep, one of the things that we've been monitoring and noticing over the last few years has been a growth in what we call the semi-formal retail sector, particularly in clothing, footwear, and home. These operators in this sector have always proved to be a bit of a challenge to Pep and its price positioning, particularly because they are built on smaller footprints. They are much more unstructured and opportunistic in their sourcing models. So in some instances, they have the ability to undercut Pep on prices.
This is something that we've been conscious of for some time. We've been monitoring the various players in the segment over the last few years, and we identified one specific target. As Riaan and Pieter alluded to, we concluded an SPA with the owners of Choice Clothing just last week for the acquisition of 100% of this business. We are really excited about this acquisition. It is a small one. There's 107 stores at the moment in the Choice business, but Choice is a very strong brand amongst customers. It has a very strong foothold in adult wear, and that's a stated ambition of ours to grow that category. It has the skills and the supplier base that are really suited to this market to be disruptive in the product that they source and in the price positioning that they have.
So this acquisition will be brought in under the Pep business. It will report to the Pep CEO. However, the team will be kept independent to protect the entrepreneurial nature of this business. But we believe it's a great opportunity to scale the footprint. We believe there's well over 300 stores' worth of opportunity here. It's an opportunity to combine the efficiencies of the Pep business in supply chain, back office, and systems with some of the group capabilities such as credit and Plus More, and combine that with entrepreneurial and unique sourcing and product skills of the Choice business. We see this as a major growth vehicle for Pep going forward. Clearly, this is subject to approval by the Competition Commission, but we don't foresee any real problems there. Moving on to Ackermans and the inevitable conversation about the Ackermans turnaround.
I think the graph at the bottom left of the slide really tells you the whole story. And if you look at the trajectory of like-for-like sales through the year, quarter one was less than 2% like-for-like. We exited the year at 8.1% like-for-like. And if you look at October's performance, 8.9% like-for-like. So that really is an indication of the great progress that Adriaan and the team have made in the recovery of like-for-like sales within Ackermans. What is more important is that was done on the back of a 540 basis point improvement in full price sales, which led to a 360 basis point improvement in gross margin. So this was not a case of buying sales. This was a case of pushing full price sales.
That really is an indication that from a product proposition and from a pricing position, the team have really started to get things right. The net effect of that was we saw market share gains in all of our big categories, that being kids, babies, school, and women's wear. In terms of stores, we opened 37 new stores. Again, that was about 20 shy of where we would like to have been because of those delayed retail developments I spoke about. And that takes the footprint to 1,041 stores. And just again to confirm that by the end of this calendar year, we will have exited the Ackermans women's format as a whole, and 35 of those stores will be moved into Speciality. And I'll talk about that new brand shortly. But all in all, I think a massive step forward in terms of the recovery of Ackermans.
As Riaan alluded to, those sales numbers dropping through very nicely to the bottom line. Moving on to Speciality and some brief commentary here. At a divisional level, we opened 61 new stores, 36 of those being Refinery stores. And again, that's in line with our stated intent to accelerate the growth of the Refinery business. That's now more than 150 stores, as you can see on the slide. At a market share level, we gained market share on RLC across three, six, and 12-month time periods. And that really was a function of an exceptionally strong performance from all of the clothing formats. So Dunns, Code, SPCC, and Refinery all performing very strongly during that period. Slightly softer from Refinery and H2, but that was just a function of late arrival of winter stock. Unfortunately, the same can't be said for the footwear formats.
Riaan already alluded to this in his presentation. Tekkie Town finds itself in a very competitive branded athleisure footwear market, high levels of discounting from tier one brands, high levels of discounting from some of the new entrants, and high levels of discounting in anticipation of the world's largest global pure play online retailer coming to the market. So Tekkie Town has struggled to both maintain a sales line and protect its margins. The team are constantly working on new strategies within that business. Then in terms of Shoe City, the Shoe City proposition is always one that is challenging. It's a small box, non-branded footwear-only proposition, and there aren't many of those globally. The other issue with Shoe City is it is very, very subject to reliance on certain categories, particularly the boots category in winter.
The late arrival of winter during the course of F24 meant that there was heavy discounting of boots throughout the market. Shoe City were forced to follow suit, which impacted both the sales line and the GP line. The team made excellent progress in terms of developing our new women's wear format, Ayana. As I mentioned earlier, 35 stores have been taken from Ackermans' women's. They will be converted into the Ayana format, which is a standalone women's format pitched around the mid-market and very much focused on key categories such as dresses, denim wear, and casual wear. We are well on track for launching that business in February of next year. More significantly, development during the course of last year, the Refinery business, we believe, and you can see it from the rollout plans, has always had somewhat of a unique handwriting.
It's a great combination of fashionability, quality, and value, executed both in terms of store theater and the actual product propositions. It's been our belief for some time that you could stretch the Refinery brand into new categories. That led to the launch of Refinery Junior. We launched seven stores plus an online channel in October of this year. Refinery Junior caters for children between the ages of 2 and 10. It is positioned well above the Pep and Ackermans business, so there is no risk of cannibalization at all. Initial reaction from customers was very, very strong. You see ZAR 4 million worth of sales across those seven stores in the first 20 days, more than 23,000 units, so incredible trading densities coming out of the stores.
What's even more significant is that 8% of the sales were online, so showing very good online participation when compared to some of the other ready-established Pepkor Speciality brands. We'll continue to monitor the sales over a 12-month cycle, but we believe that should this trend continue, there's probably between 30 and 50 possible stores here situated in super regional and some of the more popular regional malls. We think that pictures often speak louder than words. There's a short video to show you in terms of what the proposition looks like. Excuse me. Yeah. Right, moving on to Avenida in Brazil. We communicated some time ago that it was our intention to accelerate the expansion within the Brazil market. To that end, we opened 42 new stores during the course of last year. That's nearly double the 23 stores that we opened in F23.
And we have a further 47 stores planned for this financial year. Within those 42 new stores, we entered four new states within Brazil. So we now trade out of 16 out of 26 states in Brazil. So quite an aggressive expansion in terms of footprint. At a sales level, total sales grew by 20% thanks to those store openings and with strong like-for-likes in H1, but slightly weaker like-for-likes in H2, really impacted by a number of things. Firstly, in South Africa, we spoke about a late winter. In Brazil, there literally was no winter. So temperatures throughout the winter months were incredibly high, and this impacted sales of winter product. We saw a challenging environment in some of the states due to the agricultural output, and that had an impact on those local economies within the state and therefore consumer spending. We saw some product issues.
The team scored a few own goals, I think, in home and in footwear. And we saw a certain change in terms of the store maturity profile that we've been used to in the South African market. So the annualization of new stores within last financial year, when they became like-for-like, we found that they were quite heavily negative like-for-like in the initial months, so months 13, 14, 15. And that really indicated a large halo period upon opening, and that impacted like-for-likes. So if you strip out the new store impact and you look purely at the 113 base stores that were there when we acquired the business, that was a 6.6% like-for-like, which is a very credible performance given that last year was double digits. Now, we certainly have made a number of changes within this business all at once, as you would expect.
Unfortunately, there have been some teething problems, again, as you would expect when you make a number of changes to a business. Within the home and footwear categories, footwear specifically, we are annualizing the exit of the Giovanna standalone stores. So when we closed the 20 Giovanna stores in the prior year, we took the stock from those stores and we pushed those into existing Avenida stores. That stock then obviously sold in the previous year. We didn't have that stock this year. And so that impacted our like-for-like sales in footwear. And then in terms of home, as I said, there were some incorrect decisions made around product assortment and pricing. But the team have already begun to correct that.
Thanks to the local sourcing bias within Brazil, where more than 90% of your product is sourced locally, the ability to react to issues related to product are much quicker than you find in a market like South Africa. The new store maturity curve, as I said, we are seeing a different maturity curve to one that we've been used to in South Africa and to an extent in Eastern Europe when we rolled out the Pepco business. We are understanding what is driving that. We believe some of it might be related to credit. There is a 40% credit participation in Brazil. It makes sense that when we open a store and we grant credit to a customer, generally they will spend up to nearly their entire credit limit. Once they start to pay that down, they use it as a revolving credit facility.
So you've got all of those initial sales in your base that you annualize again in months 13, 14, and 15. We had to open a second distribution center in the northeast of the country. That was primarily to feed the expansion plans that we have. And like with most DCs, there were some teething problems associated with that. So the net reflection for last year is we continue to see that Brazil is definitely a more complex market than some of the other markets that we operate in. But to be fair, we knew that when we did the acquisition. We are learning more and more about the market every day, and we continue to leverage as many of our group capabilities, especially in sourcing. We continue to inject resources into that business to assist the team on the ground.
At the end of the day, we still believe that this is an attractive and sizable market. We have a differentiated proposition that we've developed over the last two years, and there still remains significant white space opportunity for us to build both a sizable and profitable business in Brazil. Moving on to lifestyle. Again, at a divisional level, we opened 54 new stores during the course of last year. 43 of those were in the home division, and that was really driven by Sleepmasters, and 11 stores in the tech division, primarily in the Incredible Connection format. We saw a stable credit mix, again, around about 12%, home division just under 20%. The team anticipated that the top line sales would be tough during this year. So there was real tight control expressed in cost of doing business by Pieter and the team.
That, again, protected the bottom line despite slightly softer sales. In terms of the home division overall, very strong performance, so 7% like-for-like in home. We completed a full refresh of the Bradlows brand and all of those stores, and we saw strong sales uplifts where those were completed. We continue to roll out the Sleepmasters brand and build what we believe is becoming the market leader in bedding. Strong category performance from both lounge and bedding in our core formats of Bradlows and Russells. The significance of brands like Bradlows and Russells was evident in the Ask Afrika Orange Index Awards where Bradlows placed first and Russells placed second in the furniture division. In terms of tech, as we mentioned earlier, softer like-for-likes in tech, but still positive.
Again, really the extreme competition that we've seen from bricks-and-mortar retailers and some of the South African pure play online retailers who have reacted to the entry of Amazon into the market. We've seen severe discounting in categories like televisions and appliances. One of the other impact points is over the course of the last few years and with the unreliability of electricity supply, the team built a very credible category in alternative power supplies. Power banks, generators, inverters, etc. With load shedding no longer an issue, customers have no need for that product anymore. That's left a significant hole in F24 in the sales of those categories. Not to be outdone by their colleagues, the tech division, Incredible Connection, was voted the top SA technology store by MyBroadband.
But by far, the most significant development for the lifestyle division was the acquisition of Shoprite Furniture and the OK Furniture and House & Home business. And again, just to recap on this slightly, you'll remember we've talked about our investment model before and how we look at each individual operating unit and we ask a question whether that business can create value in its own right. We believe that was absolutely true for Pepkor Lifestyle. However, it needed scale. So we had great back office, great systems, great supply chain capabilities, but we needed scale within Pepkor Lifestyle. We had one of two choices, either to grow that organically or to look for an acquisition target. And clearly, we didn't believe there was enough space within the market to accommodate another 300 or 400 Russells. Or Bradlows stores.
We targeted deliberately the OK Furniture and House & Home business because we believe that would bring us the scale. As we shared before, the transaction was concluded and ComCom proceeds well. Definite category synergy between the two businesses. The Shoprite Furniture business trades about 65% of plug goods, whereas Pepkor Lifestyle is about 35% plug goods. So there's great cross synergies there between plug goods and furniture between the two businesses. The transaction or the acquisition gives us access from a footprint perspective to new territories where we have not traded before, such as Zambia, as well as some provinces where we are underrepresented like the Western Cape. It represents a massive opportunity to leverage the Pepkor Lifestyle financial services skills, particularly in areas such as credit, insurance, and e-com.
And it's an ability to gives us the ability to leverage the Pepkor Lifestyle back office and supply chain to drive further efficiencies, which will enhance the profitability of Pepkor Lifestyle. Right, moving on to financial services and connectivity and starting with the Tenacity business. This has already been covered, but again, another strong year in terms of acquiring new customers and leveraging our credit base across the brands. I mentioned this slightly earlier, but if you look at the pie chart, you'll see now that 30% of the sales on any Pepkor credit card or retail credit card occur in brands outside of the primary brand where the customer acquired that credit. The 1.2 million new customers that we took on book lifted our base to 2.8 million customers.
That compares very favorably to some of the more recognized retail credits or credit retailers in South Africa in the CFH space. What's interesting is in that 1.2 million accounts, 28% of those were new to credit and 46% of those it was their first clothing account. So again, just showing the power of the Pepkor brands when it comes to customers. Riaan already spoke about the fact that our approach was extremely conservative. So our approval rate was down from 36% to 30%. And if you look at the state of the book and particularly customers in good standing, using the more stringent Pepkor measure of one month in arrears, 74% of our customers are in a position being able to buy.
If you use the more common measure of two months in arrears that some of our competitors use, that number lifts to 85% and that is in line with the rest of the market. Connectivity, Pepkor remains at the heart of connecting customers across South Africa. 11.5 million handsets were sold last year, 60% of those being smartphones, again, increased penetration of smartphones. 18% of those were private label phones under the Stylo and Premio brands sold through Pep and Ackermans. Really, the significance of these private label phones is that they make a product much more accessible to a customer in that they give them all of the functionality and quality of a branded handset, but at lower prices. From a Pepkor perspective, they certainly give us a better trading margin versus selling a branded phone.
We already spoke about the 330 basis point market share expansion of a very high base. In terms of our active SIM base, 29 million active SIM customers, that's up 5% year on year, and that's primarily what fed the ZAR 2 billion ongoing revenue that Riaan referred to in his presentation. Looking forward, certainly a very important enhancement, so we have rolled out full biometric capability across most of our store network. That is full biometric capability that does both facial recognition and fingerprint recognition. This is exceptionally important if there is legislation that tightens the RICA process on the issuing of SIM cards. It is also a capability that enables us to participate in more financial services type products where there might be more stringent KYC requirements, and more importantly, it enables us to implement our new product called Number4Life.
We've shared with you before for a prepaid customer, if you lose your phone and you need to perform a SIM swap, it is a major nightmare. You have to phone call centers. You have to remember the last five numbers you dialed, and it is a real customer pain point. Now that we have biometric capability, a customer simply joins Plus More. They register their Number4Life. We record and store their biometric information. And in the event that they need to perform a SIM swap, that can be done in one of our stores with relatively low pain point. In terms of Foneyam, this has been spoken about quite extensively.
This is our handset rental program, which gives a customer the ability to acquire a phone over 12 months, with us having the functionality of being able to lock the device in the event that the customer defaults. Just short of 800,000 units were financed or rented out using this program during the course of F24. Reminder that this was only available on Samsung handsets, and this was only available through our store channel, and if you look at the graph at the bottom of the slide, you'll see a dramatic increase in run rate, so we started off very slowly as we launched the product at the beginning of the financial year, but we topped out around 150,000 units a month towards the end of the year, and I'm told that November we could go as high as 180,000 units.
So we will certainly be able to put more than a million units every year through the Foneyam program into the market. Some developments going forward. So we've already added another two handset brands, stretching the width of the range wider that's available to customers. We've opened new channels, so both a digital channel through our website and through the Plus More app. A customer can apply for this financing. The significance there is that dramatically reduces our acquisition cost. And so we'll speak to the profitability of this business going forward. We're implementing it into some of our other retail brands, so particularly within Pepkor Lifestyle and the Incredible Connection and Hi-Fi operations. And we've just recently embedded insurance into the Foneyam product. So a customer now automatically has insurance on that handset.
We think that will reduce the NPLs going forward because one of the things that we know is one of the major reasons for defaults amongst customers is when their phone gets stolen, breaks, or is lost. And so by now replacing the handset and keeping the customer on their contract, we believe that will reduce NPL in those instances. In terms of insurance, just a reminder that we have two essential categories of insurance, the first being credit life that exists on the back of our financial service products, and then some single asset insurance, both within the Abacus insurance license. Our focus has been on embedding and bundling insurance into our existing physical and financial services products. And to that end, we activated a million policies during the course of last year. We covered more than 100,000 lives through funeral products sold through Pep, Ackermans, and Dunns.
And more than 90% of our book in Capfin now is fully covered with credit life. All of the 5.7 PAXI parcels, 5.7 million PAXI parcels were covered with basic insurance. And we now have, as I said, insurance embedded into Foneyam. And we really believe that a combination of having this license, having extensive distribution capabilities because of our extensive store network, and having existing collection capabilities through our various financial services and credit businesses means that we're well positioned to continue to build a sizable insurance business. Moving on to omnichannel, I think as we've shared with you before, we really believe that South Africa is quite unique in that omnichannel in this country means physical stores, it means the informal market, and it means digital and online capabilities. And there's no question that our customers are becoming more connected.
You can see that through our smartphone numbers. They are becoming more tech-savvy and becoming more demanding, that they are able to shop for products that they want, where they want, how they want, and when they want, and they want to be able to pay for them using different formats. We've always known that Pepkor is exceptionally strong from a store distribution network and from the informal market footprint that we have. However, we need to develop our digital channels, and so we decided to use a rewards platform to get the digital attention of our customers and then to use that digital attention and pull that into a more formal and leveraged commercial relationship. That meant that we launched our Plus More program. We shared this at the Capital Markets Day. It is the only digital rewards program in South Africa. There is no plastic card.
The entire membership or rewards program operates for customers' handset. To date, we have more than 5.5 million members as of yesterday, and what's important is 25% of those members are newly contactable. We had no record of those customers before. We've had approximately ZAR 4.5 billion worth of sales scanned on the back of a Plus More card, and from that, we've learned that 20% of our customers are shopping at more than three brands. I don't think the significance is the fact that 20% of the customers are doing that. The key is that we now know that, so the Plus More program has given us insight into consumer behavior and given us access to data, which both individual brands and as a group, we can leverage as we build our digital channels and build our digital relationships with our customers.
Finally, the informal market, I think it is common knowledge that this is by far the fastest growing segment in South Africa. GG Alcock, who's sort of seen as the guru of the informal market, estimates this to be about a ZAR 600 billion market right now. And we have our business, Flash, which is positioned slap bang in the middle of this market. And essentially, just as a reminder, Flash has two core elements to its business. Firstly is a B2B business offering where it enables traders to both sell wanted products to their customers. So their ability to sell airtime, for example, electricity, DStv, and the like, as well as enabling those traders to actually operate within the value chain.
Giving them access to things like acquiring, where customers want to use a card to pay, giving them access to the facility to be able to pay some of their suppliers and the like, all contained in the B2B strategy. And then they have an emerging B2C strategy where they build services and products directed at the end customer. So products like 1Voucher, products like the ability for customers to get their SRD payments made to them via the informal market, an example of B2C. So how did they perform over the last 12 months? 20% increase in revenue, taking them to ZAR 8 billion. Their trader base stayed stable at about 165,000 traders, but the ARPU on those traders went up by nearly 22%. We saw a 25% increase in VAS revenue. We saw nearly ZAR 16 billion worth of sales going through the 1Voucher product.
We now do in excess of 350,000 monthly SRD payouts every month, again, solving a very, very significant customer pain point. Riaan shared this with you, but that led to their operating profit growing by 38% to well north of ZAR 600 million. If you take a seven-year CAGR period, that equates to a 22% seven-year CAGR. We share that statistic with you really to give you some real evidence of why we've had confidence in this business for a number of years and why we've told the market for a number of years that we think there is massive potential for growth and that Flash can become a very significant profit generator within the group. We also know that it's hard to contextualize the Flash business, given that it's not a formal retail business.
If you refer to the table, what we've tried to do is give you a comparative against probably the most well-known competitor in the informal market and their most recent numbers that they released. If you look at the number of traders, we have nearly double the trader base that our competitor does with 165,000 against their 89. Our trader throughput is about in line with theirs, but ours is growing faster at 25%. Our ARPU growth is significantly higher. It's five times their ARPU growth. In terms of acquiring devices, we have slightly more acquiring devices at 56,000. But what's significant to note is that we had far less than that competitor two to three years back. Massive inroads from Flash in terms of getting an acquiring device footprint out there.
And in terms of the growth in the tap value going through those devices, significantly higher growth, so again, hopefully those stats just give you a feel for how significant a player Flash is in the informal sector. In terms of focus going forward, the team's focusing on driving and increasing trader spend. And that's really about launching more B2B products that meet the needs of their B2B trader customer. It's about scale and footprint, so trying to grow that 165,000 trader base. We are exceptionally well represented in the spaza shop category, but there are other areas such as haircare, the liquor market, as well as some of the fast food outlets within the informal market where we could grow our penetration. And then finally, really an increased focus on B2C products and solutions to meet customer needs and pain points.
I'll now hand you over to Pieter who'll give you a brief outlook going forward. Thank you.
Thanks, Riaan and Sean. I'll just briefly deal with the outlook. We have seen our customers' environment improving quite a bit with lower food inflation. Obviously, the suspension of load shedding has helped and the two-pot retirement system reforms, which is stimulating the markets, we can actually see the impact of that already, although I hear that most of the government employees' payments have not been paid out. So what we've seen in retail up to the 16th of November is a significant increase in the general merchandise and clothing sector, around about 16%. So we think going into what we call the golden quarter, we are very well set up. We have dealt, obviously, with the disruptions in the ports by putting more stock into the system earlier.
We think that for the first time, and certainly in the last five presentations I've made, we are feeling much more opportunistic about the next financial year. We still see a good store planning program between 250 and 300 stores. Most of those have been programmed in and have got addresses. That goes back to our normal run rate of store openings. We spoke about the fintech section and the fintech and financial service connectivity in our informal market, still seeing significant additional activity. We think we're very well positioned to take advantage of that. M&A opportunities, we evaluate quite a lot. As you say, we have to implement one or two that we've already indicated to the market, and we'll keep on looking for those opportunities as we go through the financial year. We will now take questions. Thank you very much.
Morning again, everybody. I'll deal with some of the operational questions that have come up and then pass on to Riaan and Pieter. The first question that I'll deal with was the one around Avenida and some color behind the slowdown. I think we did give quite a bit of detail in the latter slides, but essentially a few macro issues, changes in ICMS tax in a number of states, agricultural output in a number of states meant that consumer spending was a little down, and we've seen some increases in food inflation from a macro perspective. But the internal issues were really about the home and footwear categories, which hurt us a little. Then the new store maturity curve. What happened in H2 is more and more of the stores that we opened in F23 started to annualize.
That then had an impact on the underlying like-for-like. So predominantly those reasons. Going forward, the new store annualization will continue to grow as a contributor because we've got more and more stores that are annualizing. But the core like-for-likes, we believe, will improve. We're already seeing improvements in those two problematic categories. Then a question about Ackermans and H2 recovery, whether it's attributable to credit, absolutely not. The credit mix stayed pretty stable. And if you look year on year, I think the total credit mix only went up by 1% from 19%-20% in Ackermans. So that really didn't fuel the growth. There was obviously some assistance with the Foneyam product within cellular, but cellular only makes up about 20% of Ackermans sales. Then there was a question about the further breakdown of the 250-300 stores planned for next year.
It is a relatively even split. So Pep makes up about 100 of those stores with quite a large weighting towards the cellular format. We are being more aggressive on the cellular format rollout thanks to the success of Foneyam, about 50 stores through Ackermans, again with Ackermans Connect Cellular playing a part there, 50 stores within the Pepkor Lifestyle area, 50 stores within the specialty area, particularly Refinery, and then Avenida close to 50 stores, the 47 that I referred to. Then there was a question about supply chain disruption and whether we are looking at increasing local sourcing. Yeah, it's worth noting that in unit terms, Pepkor is the largest local sourcing clothing, footwear, home business in South Africa. We've got various enterprise development initiatives within Pep, Ackermans, and in our furniture division within Pepkor Lifestyle. So we're always looking to try and increase this.
But the reality is the capacity doesn't exist in South Africa for us to make a dramatic swing. And so our approach has always been to plan for disruption. And you can see that in some of the increases in inventory levels, etc. Then a question around Tekkie Town and whether we believe that the dynamics of the discounting in that market are going to change and whether we need to revisit or reposition the business. The first point I'd make is we certainly don't rely on market conditions changing when we have a business that's not performing to plan. So we're doing a number of things. The one is the increase of clothing as a category within the Tekkie Town business. And we've seen that we're having a reasonable degree of success.
We have done extensive customer research, however, that is resulting in us rationalizing the brand mix, growing private label within the Tekkie Town business, and relooking some of the store layouts and store formats. However, we don't believe there's a dramatic repositioning of the business that's needed. And potentially, those dynamics around discounting could normalize. But as I say, we're not relying on that to solve our issues in Tekkie Town. Then there was a question about credit mix in the post-year-end period. The reality is the credit mix has stayed pretty constant with last year, so no skew towards cash or credit. It's remained pretty constant. Then a question about Flash. And firstly, from a perspective of spaza shops needing to register, would that have an impact on the Flash business? Yes, it would. This is still a developing situation, as you can see in the press.
If a spaza shop was not able to register or was prevented from registering and then was trading illegally, clearly that would impact on Flash's ability to do business with that spaza. But as I say, we believe that that's still very much an emerging situation, and the teams are staying close to it, and then a question lastly about Flash and how it differs to Lesaka's offerings. Essentially, in a B2B space, Lesaka and Flash have a very similar offering in terms of what they offer to traders. The difference being Lesaka's trader mix is slightly different to ours, probably more semi-formal rather than informal, and then Lesaka have a bigger B2C component to their business with components such as EasyPay. I'll hand you over to Riaan now to deal with some of the other questions.
Thanks, Sean.
First question was around inventory and inventory levels, specifically around the 14% increase. Is it due to demand or such as additional inventory that we've got? So the short answer is yes, definitely due to demand. As I mentioned, specifically on the cellular side with the growth, we've seen specifically from Foneyam. We at one stage had a shortage of specifically Samsung phones. And that was one of the main reasons why we've decided to increase our handsets and specifically smartphones inventory. And also, we've entered into agreement where some of the handsets we can now get directly from the manufacturer. Similarly, on the Pep and Ackermans side, that's the other area where we've increased inventory significantly. We felt that we've lost out on sales during specifically the first part of the year. And we did anticipate to see a significant uplift in sales in October, November, and December.
That's why we specifically build in additional buffer stock, etc., and you would have already seen from the numbers that we've published that strategy has paid off with a significant increase in sales in October and November. The second one was around our bond strategy. We've issued bonds every year. How do we see the mix between bonds and normal bank financing? So maybe just to refresh everybody's memory, we did a total refinance in 2018 of ZAR 18 billion, mostly with the banks at that stage. We entered into the bond program in 2020, and the strategy was to diversify away from only banks, the five major banks, and enter into more institutional. That strategy has paid off for us. That's why we've issued bonds every year, because we get it at significant better rates.
And over time, that's also ensured that we now see better rates on term loans from the banks as well. So we'll always have a mixture between bonds and bank financing, roughly between 40%-50% on bonds, and the rest from term loans from the banks and revolving credit. And that has already paid up. You see every year that our average interest rates or the margin we pay on top of JIBAR has come down. It's continued to come down. And we see even further benefit in the new year on that. Then there was a further question on fintech margins. Currently, we've seen it's about just over 11% between Flash and financial services. Do we see further upside and where it's going to end? Difficult at the moment to say where it's going to end.
As I've mentioned in the past, we don't see significant further growth on the Flash side. There is still a bit of potential. The biggest benefit we do see is on the financial services side, specifically on Foneyam. At the moment this year, remember, Foneyam still made a small loss. This year already, we anticipate it's going to make a significant profit, and also, with A+ starting to kick in now that it's sort of level or more normalized, there's bigger increase in margin there. And then, as I mentioned, insurance, we've only really started with lots of upside, so we're anticipating definitely 3%-4% increase over the next couple of years. And then just a last quick question on the acquisition of Choice Clothing. Again, to confirm, very small acquisition, only 100 stores. Price paid is ZAR 80 million. So not significant.
The bigger scheme of things is more about the long-term opportunity that we see, and that's why we made that strategic acquisition. Thanks. Hand over to Pieter now.
Thank you, Riaan, and hello again. As you can see, we spread the workload evenly. I get one question and about four slides. The one that I'll deal with actually deals with one that I can't answer, which is the Ibex Topco question where we had a question if somebody's asked whether Ibex is going to increase their stake after reducing it to 30%. Just to explain how we look at that, Ibex is public like every other shareholder in Pepkor. It gets exactly the same information at the same time, and they'll make their decisions based on the same information that we give to you as a market. So we're not really in a position to influence that.
They publish quite well in their financials what their intentions are, including some of the legal wrangles that's been going on around their position, so fortunately, I can't comment about that, but best to say they're in exactly the same position as every other shareholder. There are a few questions that we were not able to get to, but you're welcome to contact Ian directly, and he will try and get to those, and obviously, if you have some more questions, he will deal with that, so thank you very much for your attendance. Thanks for your support for our company, and goodbye.