Welcome to the Pepkor Holdings annual results presentation for the year ended 30 September 2025. As per usual, I'll make a few introductory comments. Actually, I have more slides than usual. Then Riaan will do the financial performance analysis, and then Sean, joined by Garth this year, will look at the strategic implementation of our retail business. We'll finish off with an outlook of how we've been trading since year-end. While we're busy, you can send in your questions, and we'll answer them at the end of the presentation. In terms of the purpose and the context, the slide that we put in just to remind our investors what our purpose is, and it's really to build a customer proposition that meets our customers' needs, mostly in the discount section. That's why we talk about essentials and making it affordable and accessible to all.
You'll see some graphics this year. It's in our DNA, and that's the theme that we're portraying in our set of results presentation this year. A bit of a busy slide just to remind you about our DNA. When PEP started in 1965, a good 60 years ago, our strategy is really to scale whatever we do. You'll see from 6,000 stores this year, 25 new stores a month, cellular phones now a million a month being sold from the first one in 2000. Funeral policies, you'll see the transactions in Flash up to 4 million a day. Huge growth in PAXI at 20,000 parcels every day now. Of course, FoneYam, which Riaan specifically will talk to you about from a financial impact, but certainly 170,000 new customers every month.
Last but not least on this slide is the loyalty program or the +more program that's really grown very well in the last 18 months and up to 13 million customers. That's what our business is built on, solving these customers' needs at scale. Just a bit of context about the operating environment. We still see, as everyone has reported, low GDP growth. There is some good news, a bit of lower inflation on especially food stuff, which is very important in our customers' world. Unemployment numbers seem to be trending down for the first time in a long time. Of course, interest rates are also coming down. In that environment, increased competition or severe competition is still very much the theme of the day.
Everyone competing all the time, 24/7, from in all the different areas of retail, which is now omnichannel stores, informal market. Our customers really, they need and they want to transact everywhere, anytime. What do we do at Pepkor? In terms of our strength, how can we? We still have all the well-established formats. As you see, some of these retail businesses have been around for some over 100 years. We have a very extensive supply chain. Our reach in retail footprint and the informal market is something that distinguishes us from other more traditional retail formats. We are expanding our digital capability all the time. That has given us a strategic focus. We still execute on entrenching our share in the existing categories that we operate on. We develop and grow nascent and new formats, categories, and segments.
We are always looking at expansion, including international expansion. At the moment, we still have only Brazil and some of the African countries, but constantly looking at other opportunities. It has been a busy year. What we are trying to explain on this slide is that we have been busy with quite a lot of key strategic initiatives, but we have not relaxed in the pace of execution on our traditional business. We entered an off-price market business called Choice that was executed during the year. Some of these others we will talk to more in detail, but some of these transactions that we list there have been concluded after year-end. Certainly, the PAXI, Skooch integration is really very promising for us. Again, I spoke about the +more program that has grown exponentially.
The headline of this set of results, we're very proud of what the business has been able to achieve, which is a 23.4% normalized HEPS growth. Riaan will explain to you what's in and out of there, but that was underpinned by great market share gains. Again, the 6,000 store being opened. As you would have expected from all the teams in Pepkor, very disciplined cost management to underpin that performance. Last but not least, we are now in the top 30 in the FTSE Responsible Investment Index. We continue to hand out learnerships to train people, 4,000 learnerships, by far the biggest in the country, as my understanding, putting on all the other solar and other ESG initiatives. Of course, I always have to mention Lay-by-Buddy, and that's been a great initiative supporting our customers to pay their laybys.
Now for what you've all been waiting for is Riaan will deal with the financial performance and unpack the year's metric for you.
Thank you, Pieter. Morning, everyone. As Pieter said, I'm going to take you through the results for the year. Just to maybe highlight one thing again, I'm only going to present the continuing numbers, operations numbers for this year. I'm sure most of you will remember last year we still had the building company in our numbers, and it was shown as a discontinued operation last year already. Although in some of the reports we'll still report on total operations, the presentation I'm going to do today will only focus on continuing operations. If we quickly look at some of the highlights for the year, very pleased to report that we grew turnover or revenue by 12%, achieving ZAR 95 billion in revenue, almost getting to ZAR 100 billion revenue this year.
Operating profit in line with that, showing good leverage, growing faster than top line, at 13.2%, mainly driven by a nice improvement again by gross profit margin. Overall operating profit ending at just over ZAR 11 billion. In line with that, HEPS is also up by 14.8%, predominantly driven by an improvement in or a lowering of the finance cost that we pay to funding because of the reduction in interest rates and better interest rates we received on refinancing of some of our lending, resulting in a HEPS of ZAR 1.61. As Pieter mentioned earlier, there was a once-off adjustment last year because of a tax provision release. If you normalize that in the previous year, we've got a 23% growth in HEPS compared to last year. Some of the other indicators, cash generation is still very strong, close to ZAR 11 billion.
Yes, if you take it at a pure cash conversion rate, it's down to 68%, but that was predominantly driven by above-expected growth in FoneYam, which really exceeded all our expectations, ending up at, if you eliminate FoneYam from the cash conversion and take the ZAR 1.8 billion that we invested in that book this year out of the equation and also the profit, means that we generated 82% or cash conversion was 82%, which is above our internal target of 80%. Similarly, return on net assets, we see an improvement this year, up from just above 22% last year to 24%, mainly again driven, although we invested quite a bit in the books again this year. Initially, we anticipated it was going to be at the same level, but because of the exceptional performance of FoneYam, we end with it achieving a very nice profit during the year.
Our return on net assets increased by 24% or showed a target of 24%. Very pleased to announce that our board announced a dividend declaration of ZAR 0.53, which is 10% up on last year. I thought I'll just again maybe show our business model to all of you. I shared this in detail last year at the Capital Markets Day. It's just a quick refresher on how do we look at the business every year and what are some of the key targets that we want to deliver. As I shared with you last year, we always want to achieve a double-digit top-line growth above 10%, like-for-like, above inflation between 5%-6%, space growth 3%-4%. Fintech, we always see as the profit boost that needs to grow faster than our retail turnover or retail sales. We want to see positive leverage.
In other words, operating profit needs to grow faster than top-line growth. Then double-digit growth on the HEPS side as well, depending on finance cost being lower. Our HEPS growth should be higher than our EBIT growth and always still give a good return to shareholders of at least 20%, however, it would like to be closer to the 25%. Just a quick check, how did we perform this year against those metrics? Very pleased to say on all of them, we overachieved, like-for-like, above the 6.5%. If you just look at South Africa, that number is even higher. Very good space growth, again 4.1%. Then really the phenomenal growth in the fintech segment of above 31% meant that we pushed well above the 10% revenue growth, ending up on the 12%. As I mentioned, good leverage in operating profit, ending above the 13%.
With the drop in finance cost, our HEPS is close to 15%. Again, as I said earlier, normalized HEPS at 23.4. RONA, we still saw a steady improvement this year, hitting the 24%, very close to our long-term target of 25%. Just to confirm, we've delivered all these KPIs in a year. We'll obviously unpack later, and Pieter already mentioned there's a lot of M&A activity. We've also launched several projects during the year, of which most of them will only see the benefit in the next two to three years, but still delivered phenomenal results. Just to quickly look at the HEPS growth again, to unpack it a bit further. As I said, 14.8% or 15% up on a statutory basis from the 140 to the 161.
If you eliminate that once-off adjustment last year, which was ZAR 355 million provision that we released, or ZAR 0.097, that drops last year to ZAR 1.30, which means that's where we get to 23.4%, which you see as a normalized growth. Also very happy to report that consensus from the market was that we should achieve ZAR 1.61. So we have that achieved. We obviously did guide the sell-side analysts very well during the year that they ended up on exact correct number. From a retail segment, there's lots of movements this year and post-year. I thought I'll just again highlight how we look at the segments in the group. The two retail segments being clothing and general merchandise, and then the furniture, appliance, and electronics segment. During the year on the clothing and general merchandise, we did add Choice Clothing from the 1st of June.
Pieter spoke about that earlier. Post-year-end, two acquisitions. Firstly, on the lifestyle side or the furniture and appliances side, we acquired non-RSA component of [Alshanaman] Furniture. On the 2nd of November, the deal was finally concluded with Retailability to bring certain of their brands across, Legit, Swagga, Style, and the online Boardmans brand. All of that has been concluded, and all of that will be incorporated in the New Year's results. On the fintech side, we've got the two areas within fintech. Phenomenal growth in this area, specifically from a profit perspective during the year. We also did one acquisition here, a company by the name of CloudBadger. It's a company that specializes in software for banking systems with our aspiration to get a fully-fledged bank up and running in the next couple of years.
We've been busy with it for the last two years. We've already got approval from the Prudential Authority on Section 13, which Garth will unpack later in a bit more detail. Very pleased to announce that we did this acquisition at a very low cost compared to the money that some other companies have spent on getting a banking system up and running. If we just look at the overall split and the segments, how does it change from last year to this year? Last year, still majority came from clothing and general merchandise, as we've seen the last couple of years. There's been quite a move in that. With fintech, with the growth we've seen this year in that segment, specifically from financial services, profit going from a 14% contribution last year to a very good 20% this year.
We anticipate that that growth will continue in the new year, growing faster than the retail segments. We just unpacked the revenue growth a bit further, the 12%. Where did it come from? Still very good growth from clothing and general merchandise, although the second half was slightly softer than what we reported in the first half. Still very good numbers from PEP and Ackermans. Avenida also showed a very good recovery in the second half, and Africa also did very well. However, unfortunately, due to currency impact on both of those, had a negative impact on their revenue growth and also on their like-for-like growth, which made that number end up slightly lower than what we would have liked. However, on the furniture and appliance or lifestyle side, very good numbers, very good like-for-like, specifically on the home side.
Furniture side exceeded all expectations, and tech also contributed a positive number in difficult times. If you look at specifically on the credit mix within the two retail businesses, with the Connect book and the A+ book that we have there, and to a lesser extent, the Avenida book, last year, 14% of the sales was done on credit. This year, that has increased to 16%, with credit sales increasing by close to 28%, cash growing by 6%. Although what we have seen is there's definitely a move in tender types from other areas into credit sales. Again, the key point we've got to make is there's been a lot of questions asked on the growth in A+ specifically. We are still predominantly a cash retailer, only 16% of the sales in the retail business is happening on credit.
If we just look at the fintech growth, that phenomenal 31%, where did it come from? You'll can see there the contribution last year was still predominantly from Flash. That number during the year has now reduced with 55% of the revenue coming from Flash, with a growth of close to 14%, which is still a very good number. Financial services exceeding all expectations, growing by 61%, which means 45% of the revenue in this segment now comes from financial services. Just to unpack that last component a bit further, where did the 61% come from? Top of the list really is the FoneYam product or Cellular Handset Rental product grew by more than 100%. Insurance, as we've communicated last year, we've got years of expectations. We've invested quite a bit in there. It showed a very, very good growth above 70%.
Yes, we did see on the A+ book with the number of accounts open and increase in the limits, still good growth on the A+ book specifically. If you just unpack that a little bit further, exact numbers, what was the growth? This was the split in the different companies in the financial services last year. If you look at where they are now, you can see FoneYam going from 10% last year to 26%, as I mentioned, above 100% growth. Abacus, the insurance business, going from 10% to 11% contribution, but more importantly, a 78% growth on last year. Although A+ did grow by 37%, you can see the contribution to the segment or this specific area did reduce during the year, even with that very high growth number.
If we then quickly unpack the gross profit number, overall, very pleased to say we're close to 40%. I know during the year I guided it will be just over 39%, but again, financial services exceeded our expectations in the second half of the year, meaning GP is up by more than 100 or by 150 basis points. If you look at the underlying reasons for the movement in the different segments, although clothing and general merchandise is slightly down, that's predominantly driven by the larger mix from cellular and set sales, again driven mostly by FoneYam, with us selling more smartphones. And cellular obviously runs at a lower GP than clothing. Although I'll show later on, we did show an overall profitability in cellular for the group this year, even with that lower GP and ongoing revenue.
The positive thing is on the clothing and clothing, footwear, and home side, we were able to maintain our GP during the year. Even as I said earlier, if you look at the randoms on Avenida and on Africa, it showed a negative trend. Overall, we still at the same level with PEP and Ackermans having more full-price merchandise sales this year compared to the previous year. Very good number from the furniture and appliances side, with the growth, as I mentioned earlier, on the home side or the furniture side, which comes at a higher GP than tech, has resulted in them increasing their GP. It was further enabled by good increase in their volumes, which means higher rebates from some of the suppliers.
On the fintech side, as I said earlier, a phenomenal growth in their GP, as we've seen the last couple of years, this year with FoneYam specifically, which we do know runs at a higher GP, has been widely published, runs at a significant higher than what we have in some of the other financial services products. Because of the type of product, we have to run it at a higher GP. There's obviously a higher risk associated with the transport of handsets, high insurance we have to cover. There is also embedded insurance in this product. Our approval rate currently is still sitting at 85%, which means your provision is higher compared to other financial services products where the approval rate's a lot higher. We have to currently build in for that risk. That's why we run at a much higher GP in FoneYam specifically.
Cost of doing business, yes, we always want to keep our cost of doing business lower than our top line growth. Unfortunately, we were unable to do it this year for some very specific reasons, which I'll show you now. Our cost of doing business did go up by 0.5%. OpEx growth, if you eliminate debt discount specifically, grew by 12.5%. However, as I said, we did take a strategic decision to invest in certain parts of the business specifically, of which we're already seeing the benefits in this year, but we'll see even more benefits of that going forward. The first is around customer acquisition, around specifically canvas across for FoneYam, A+, etc. We've invested more in the +more program that we've got, and also additional marketing spend around it.
On the insurance side, specifically in the Abacus business, we've invested more in people and in systems because, as we've communicated in the past, we still see significant growth in this business over the next two to three years. Needless to say, we had some corporate activity around some M&A activity where we've already had to incur some expenses and already in line with the acquisition of the business post-year-end, we already incurred some of those expenses before the end of the year. If we eliminate those expenses specifically, we look rather at a normalized 8% expense growth. However, what is key for us, the two biggest expenses in the business are still very well controlled and managed, those two being salary cost and rental.
Although you'll see their salary cost for the year went up by 13%, however, if we eliminate those three items I've mentioned above, and also the additional bonuses we had to pay specifically in the fintech segment because of the phenomenal performance during the year, salaries only increased by 6%. Remember, that includes new stores as well. Property side, rentals, similar trend, still having some slight reductions on rental renewals, not as much as used to be. Also, again, we went through a process this year where we closed unprofitable stores and really moving to lower rentals in more profitable areas, which has contributed to that very low growth of only 1.4%. This obviously all plays out in our operating profit. Firstly, as I said, very pleased to see the 13.2% growth.
If you look at the underlying reasons, yes, clothing and general merchandise and furniture and appliances, their profit did grow slower than their top line, and there are very specific reasons for that. We will unpack now. Fintech, however, top line being 31%, grew their profit by 52%. If we look at the specific reasons on clothing and general merchandise, as we mentioned in six months' results driven by AYANA, which is obviously running at a loss still this year, we have made significant investment. Being a new business, Shoe City, unfortunately, underperformed this year, and Sean will talk later about the future of Shoe City. As I mentioned, both Avenida and Africa currently working against them with the rand strengthening against both of them, so it means their profit was at the same level or lower than last year.
We also had a change in our IFRS 16 calculations this year for Speciality specifically and for furniture and appliances, where in the past we used to include an option period. We have now eliminated that, which meant that for those two areas specifically, it had a negative impact on their operating profit growth. To give you a specific example, on the furniture and appliances side, our pre-IFRS 16 profit growth was closer to 25%, where you can see the 5.1% there on a statutory basis. Secondly, what had a further impact on the furniture and appliances operating profit growth, as I mentioned, we have already, with the anticipation of the OK Furniture business, already incurred some expenses in that area, which meant that the profit growth was slightly lower than what you would have anticipated.
Fintech, as I said, mainly driven by FoneYam, went from a small loss last year to an almost ZAR 500 million profit this year. If you look at that profit split between the two areas within fintech, being financial services and Flash, Flash still delivering a very good 33% growth in profit, although you would have seen their top line was only 13%-14%, and financial services growing by 67% versus their growth or top line growth of 60%, predominantly, as I said, driven by FoneYam, but also by the insurance to a lesser extent. That plays out into our operating profit margin. Again, pleased to report, we have seen a 10 basis points improvement, not yet quite at the 12% that I've been communicating to you the last couple of years.
That's still our target, but with some of the investments that happened this year, we think that will now only happen in two years' time. On a CGM basis, that percentage went down. Furniture and appliances stayed more or less at the same level. Just to look at the breakdown per operating entity, where did that come from? PEP stayed at the same level as last year, and we have seen, as we communicated during the year, a 40 basis point improvement in Ackermans, so very close to where we think they should operate. Speciality, unfortunately, went down because of AYANA and Shoe City. If you eliminate that, you'll see them just above the 10%, which is in line with where they were last year.
As I mentioned, Africa dropped slightly because of the impact of Forex, similar to Avenida, which is just below the 5%, where last year they were just on 5%. Lifestyle, as I mentioned, stayed at the same level, being the 5%. As we have communicated previously, we will only see an improvement there with the full implementation of OK Furniture and House & Home. On the fintech side, a completely different picture. With Flash, as I have communicated the last five years to you, Flash, we always anticipated should operate at about a 5%-6%, but the last two years we have seen exponential growth because most of the systems have now been implemented, have been invested in.
Our expense growth on a like-for-like basis was very low this year, which is the main reason why our profit could grow by the number it grew, and why our OP percentage is below 10%. Financial services overall went from above 10% to close to 20%, mainly driven, again, as I mentioned earlier, by FoneYam, which went from a loss last year to almost 25%, and also by Abacus, which also increased even with the investments that we've made during the year. Just to take note of, in the past, I've always indicated to you that on the A+ and the Connect books, we don't really want to make a huge profit. If we go above 5% profit or OP percent is actually too high because we want to keep it as low as possible here, just make a small profit.
The profit needs to be shown in the retailer because they are purely sales enabler to get the additional GP on the retail side. Capfin, very much stayed at the same level as last year because of a slight drop in their or increase in their non-performing loans. Overall, fintech up by 180 basis points. Specifically on Abacus, because we had lots of questions during the year on Abacus, where do we see insurance going? Very happy to say from a statutory perspective, they doubled their profits, went from ZAR 92 million to ZAR 185 million, and the contribution to the rest of the group also increased, so fees, etc., that we pay to the operating companies. Overall, a 40% growth in profit contribution for the group from Abacus. Interesting to note, quite a change in revenue mix this year compared to previous years.
Historically, Abacus only used to serve the lifestyle business. As we've explained, we've rolled out more products in the fintech side, specifically on Capfin and FoneYam, and also on the clothing and general merchandise side, which means that 44% of our revenue now comes from fintech and 50% comes from clothing and general merchandise made up of the PAXI product, but also where we started to do our own funeral insurance, where previously it was done by an external party. Just to focus, I mentioned earlier, yes, we do run at a lower GP on cellular, but fortunately, the business model works in cellular that your operating costs are significantly lower than what you have on the other normal retail businesses. With the impact of FoneYam, we sold a lot more handsets.
You'll see there a 21% growth, also higher-end handsets, selling more smartphones, and very pleased to show that we also had an improvement on ongoing revenue this year. We were concerned at some stage that it was going to be fairly flat because of change in some of the long-term contracts, but we had an increase in spend specifically on our SIM cards, which enables that ongoing revenue, again, primarily driven by the FoneYam product, which means that the SIM card stays longer in the handset. Operating profit up by 20%, but OP percentage very close to the group average now of 11.6%, we had 11.1%. If you now take this a step further and say FoneYam is directly related to cellular handsets, if you don't sell the handsets in the store, you can't do the financing on the rental of the product.
Because Pepkor sells 8 out of 10 prepaid phones in the market, we're the only company in the market that's able to really provide funding to the majority of the phones being sold in the country. That revenue on FoneYam went from ZAR 400 million to almost ZAR 2 billion during the year, pushing the overall growth up to 21%. If you unpack the profit, as I said, last year we made a loss on FoneYam. This year we made a profit of ZAR 500 million. Overall, if you combine cellular product sales and the funding or the rental of that, we are above 12% operating, which is higher than the company average. Just to, again, remind all the analysts, only the FoneYam and the Flash OGR sits in the fintech. The rest of the cellular profits all sits with PEP and Ackermans in the clothing and general merchandise segment.
More importantly, overall, 30% of the group EBIT now comes from cellular and cellular-related products. If we then specifically focus on the cellular rental book, FoneYam, lots of questions were asked in the past. Yes, can we maintain the bad debt ratio or the ECL ratio? What's the impact of non-performing loans? We've seen for the six months' results already indicated, we think our long-term view is closer to 24%-25%. We've now got close to two years or 18 months of history, so we can a lot more accurately predict what our non-performing loans will be and our provision. The guidance and the view at the moment around 24%-25% is a long-term view, maybe with some upside in the longer term. We ended up on 25%.
As I ever mentioned, the book doubled during the year, but with the ZAR 500 million profit generated, our return on invested capital is above 23%, and we think there is even further upside in that number going forward. On the unsecured lending side, there we've seen that, yes, there was a slight deterioration in the non-performing loans during the year. It went up from 8% to 9%, which meant that we also had to slightly increase our provision, and that's predominantly due to the fact that DebitCheck was fully introduced during the year, the last couple of months, and not all our customers are currently on DebitCheck. About 63%-65% of our customers are on, so there's a drive to get a higher percentage on DebitCheck because normal debit orders only go off later during the month.
That focus is ongoing, and we're comfortable with in the next three to four months we'll be back in line, and the non-performing loans will be lower. From a profit perspective, very much at the same level as where we were last year. The sales enablers or the books that, as I mentioned earlier, we don't really want to make a lot of profit. We want to make the profit on the retail side.
You'll see there the A+ book, as was discussed during the year, increased by almost ZAR 3 billion on a gross level, but I'm very happy to say that non-performing loans actually went slightly down from above 13% to below 13%, which meant that our provision could also go down from above 19% to below 19%, which again confirms that we are very conservative in credit granting, as we've explained during the year, and it still means that we've got a very healthy book on the A+ side. Similarly, on the Connect side, also saw an increase in sales here. The furniture sales contribution used to be just below 19% on credits, now above 20%, and you would have seen that there was also a reduction in non-performing loans and provisions, which helped with that increase in profitability that I showed you earlier.
On Avenida, as we explained in the six months, we were some concerns around the state of the customer in Brazil, so we decided to close the taps a little bit there, which means that the non-performing loans went down and provisions went down. It does, however, mean that probably in the first six months of the year, we lost some sales in Avenida due to having fewer credit sales in that business, but going forward, we will monitor that again. Just to answer the question on the increase in debtors' costs, I had that several times also during the year. Why is the books overall growing by just more than 40%, but why is debtors' cost increasing by 62%? As I explained, it's really predominantly due to two interventions, the one being the A+ book, which we started two years ago.
You can see there because you load the provision upfront and then you only write off bad debts about nine months later. It means in the first year of that ZAR 366 million to ZAR 180 million was provision, the rest was write-offs, where this year it is ZAR 280 million of write-offs, the rest—sorry, of provision, the rest is all write-offs because you had a catch-up to do because of the steep growth in the book. We anticipate that should now start to normalize next year. Similarly, on FoneYam, last year the provision was ZAR 200 million. This year the provision is up to ZAR 300 million. The rest was write-offs during the year, again, to do a catch-up with the lag of the nine-month effect. We have now got a full year during this year, so again, why we anticipate there should not be that huge a growth again in the following year.
You can see on the rest of the books, although they still grew by 35%, bad debts or debtors' cost is only up by 31%. We have really started to stabilize. Just maybe an indication, our model showed that for next year, the books overall should grow by ±30%, but our debtors' cost should not grow by more than 35% based on current indication. Fortunately, on overall net debt levels, it did increase by only ZAR 1.6 billion, given the fact that we invested ZAR 9 billion during the year in all the books. From a net debt to EBITDA ratio, still sitting at 0.8%. Last year we were at 0.7%, so well within my internal guideline of a 1x net debt to EBITDA.
As I mentioned earlier, very successful raising of bonds and refinancing of almost all our term loans, which means from a purely financing cost, excluding our IFRS 16 cost, our funding cost actually went down by almost 8% during the year compared to last year, which helped us in deliver that very good HEPS growth. Also, from a debt repayment profile, see they're very good for the next two years, only really the repayment of the bonds that comes out in March and April, March and May next year, and we've already started that process to refinance those bonds. Very also happy to say on inventory level, only a 6.3% increase. We had lots of challenges last year, as is widely known with the port challenge. We had to build in additional buffer stock. We had a higher goods in transit last year. That's fortunately all been eliminated.
If you take out the new stores that we opened this year and the two new formats being Choice and AYANA, that stock level overall is actually down on the previous year with a very nice improvement in stock turnover. As I mentioned previously, also very clean stock with more full-priced sales during the year. Just to look then at the overall cash generation, as I said, ZAR 11 billion generated in cash. Again, if you eliminate FoneYam, which was ZAR 1.76 billion, you'll see there, and the EBITDA on that, we actually generated ZAR 12.7 billion in cash, which is an 82% cash conversion, again above our internal target of 80%. You'll see the majority, that's despite us investing significantly in the three books, as you can see. That includes still the retail credit and the lending book. We could still achieve a very high cash conversion ratio.
As I mentioned earlier, with the good, we did warn everybody last year, two years, we are investing the books. With the way that you provision for the books, when you start growing the numbers, you take the provision upfront. We did anticipate the last two years for RONA to go down. As I mentioned earlier, with FoneYam now generating a profit of close to ZAR 500 million and the good return we're getting on that book, our RONA has actually improved this year with all the other investments that we've made as well. We're getting to our long-term target of 25%, which we'll have to see if we can achieve in the next two years. Capital allocation, historically, our CapEx investment's always been around the 2.3%-2.5%.
That's with normal number of stores that we open between 250 and 300 stores, also store refurbishment and IT investment. This year, however, we had a slightly higher investment, and that's because of some of the projects I mentioned earlier. With us investing in our own courier service via Skooch and PAXI, we had to invest quite a bit in systems. With us developing one dark store for the group, that's also taken some investment into systems and then just generally investments with the anticipation of the implementation of some of the M&A projects. You'll see there on financial services, on Abacus, like I mentioned, we specifically invested quite a bit of capital. Similarly, with the banking system that we've acquired, there's further investment that we need to make around that.
From a cash investment perspective, we do see that retail credit and the cellular book will continue to grow. Just to confirm, these were the acquisitions that were done during the year from an M&A. Choice, as I said, was done on the 1st of June, and then the House & Home and Furniture was done for non-RSA just after year-end. Similarly, with the CloudBadger banking system, also done on the 1st of October, and then the Retailability brands was acquired on the 2nd of November, as was announced. Pieter also mentioned it earlier, we're continuously still looking at opportunities in the fintech and international side. The key message out of all of this is, although we've invested significant amounts in M&A, merger and acquisitions and also into certain other projects, we could still deliver a phenomenal set of results.
Those numbers could have been even higher if we didn't do all these investments, but we will see the full benefit of these investments in the next two to three years. I think the second key message I just want to share with you is that you'll see financial services is growing a lot faster than normal retail operations, and we're seeing that trend to continue. We will unpack this a lot more at the Capital Markets Day next year that we think that you need to value Pepkor really, not only as a retail business, but need to look at the different components within Pepkor to do a true valuation of where the share price should be. Again, very happy to report with all of this happening and investment. We kept our dividend policy exactly the same.
I was able to pay for all these projects and investment from normal cash generated and funds that we could acquire from banks, and that is still the view going forward. The dividend of ZAR 0.53, which as we said, is about a 10% growth on last year. Very pleased that we could announce that dividend and will be paid in January. On that note, I'm going to hand over to Sean.
Thank you very much. Thank you, Riaan. Good morning, everybody. As Pieter mentioned, I'll take you through some of the detail behind the various business units. As is normally the case, we'd like to sort of start off by reviewing our strategic model, which I know a lot of you are fairly familiar with.
We've always said our strategic model starts with us trying to have a deep understanding of our customer, what their needs are, and what their pain points are. Once we understand those, we ask ourselves the questions, can we execute on those needs? Can we solve those customer problems? Clearly, can we do that in a way that monetizes an opportunity for Pepkor and provides a return to all of our stakeholders and shareholders? The result of that strategic process means that Pepkor trades across a number of different categories, both in physical and virtual products. We trade across a number of customer and market segments. We trade across a number of channels, and clearly, we operate in a number of different geographies. That entire strategic model is underpinned by Pepkor's scale, by data and technology, and by the 50,000 incredible people that work in this business.
From that customer-centric strategic model, we've identified four main levers for growth going forward. The first is what we call our core retail or retail core lever. That encompasses us looking at where can we expand in categories, where can we expand in market segments, and where can we expand in geographies. The second lever relates to financial services and connectivity. That's our retail credit business, our insurance, our cellular, and our other financial services, which Garth will take you through. Our third lever is omnichannel, and that's really where we try and see how we can utilize or capitalize on the unique situation that Pepkor has in that we have access through physical stores, we have access through the informal market, and we have access through digital channels to reach our customers.
Finally, the fourth lever is about leverage and efficiency, and that is really where we look at areas like sourcing, supply chain, and data and technology. Each one of these levers has a lens of business as usual, so focusing and making sure that existing business units operate efficiently. It has a lens of organic growth initiatives, and it has a lens of strategic capital allocation or M&A type of activity as an initiative. I will try and use that structure to take you through the performance of the various businesses. Starting with retail core, at a headline level, using the key indicator of like-for-like, you saw Riaan's kind of business model earlier. Like-for-like ahead of inflation at 6.5%, particularly strong in Southern Africa, where we were at 7.4%. Outside of South Africa, at constant currency, like-for-likes of 8.9%, driven mainly by the performance of PEP Africa.
Now, that like-for-like performance, as well as our total growth, was well ahead of the market, and you can see that from the slide that we gained market share on a 12-month moving average basis in nearly all of our high-value categories. That being kids, that being men's, being women's, being cellular, and being home. This entire performance was really against a backdrop of a very strong H1, definitely assisted to an extent by some of the two-pot stimulus that we saw. It was influenced by really improved availability across most of our business units. Riaan referred to this as we made a deliberate decision to bring stock in earlier to offset some of the issues we'd had with ports in the past. Exceptionally strong price and product execution, particularly in our discount and value brands.
Really, as Riaan mentioned, the outcome of this is we ended up in a very clean and healthy stock position at the end of winter and going into summer 2025 of this year. Let's have a look at the specific business units. As always, we start with our biggest business, which is PEP. As Riaan mentioned, PEP had a very, very good year across all measures during F2025. We opened 95 stores. Half of those were in the increasingly successful Home format, and that brought our total PEP footprint to 2,700 stores. PEP and Home now has 460 stores. That makes that the largest footprint of any specialist home retailer in South Africa. Like-for-like sales in PEP, extremely strong at 9.3%, and that meant they gained market share across many of the core categories that they operate in.
These sales were enabled to an extent by increasing credit penetration, so credit was up about 300 basis points, but still ending on a modest contribution of 12% of sales. Just a reminder that PEP really is a business that focuses predominantly on discount cash customers. PEP's execution of their customer proposition was really evident in the high level of engagement they got across their digital channels. There are two hashtags that customers use. They use #PepFinds and #PepHomeFinds, and they use these to brag on social media about the amazing deals that they found in our stores. What you can see from the slide, there were 186 million views of #PepFinds and another 256 million views of #PepHomeFinds. Just really reiterating what level of customer satisfaction and what level of customer engagement they have.
Despite the fact that they do not trade online or up until very recently, they did not trade online, they had 43 million visits to their website during the course of last year. Again, really building a strong digital relationship with their customers. PEP's dominance in the handset market continued. Units were up 12% to around 9.2 million cellular handsets, with about 60% of those being smartphones. The growth trajectory of PAXI really continued upwards. Units up 25% and more than 7.1 million parcels distributed across South Africa on behalf of our customers. Probably the most celebratory thing during the year was it was PEP's 60th year of making it possible for everyone to look and feel good. Moving on to Ackermans.
Ackermans opened 50 stores last year, passed the 1,000 store mark despite the fact that they closed around 50 women's standalone stores, as we reported at the end of H1. Of those 50 shops, 22 of them were in the Ackermans Connect format, so that's the small box specialist cellular Ackermans business. Like-for-like sales were very strong at 7.1%. As you can see from the graph in the middle of the slide, this was a significant step forward in the continued improving like-for-like trajectory that we've seen out of Ackermans over the past three years. If you look at F2023, you can see quite significant negative like-for-like moved into moderately positive in F2024 and in F2025, 7.1%, as I said. Online sales growth particularly strong at 36%, but still quite a low contribution to the overall Ackermans sales.
What was really encouraging is that this sales performance was achieved with a 90 basis point lift in full price sales versus prior year, which enhanced the clothing, footwear, and home margins, gross margins within the business. Credit sales did assist to an extent, so credit was up 200 basis points to 22%, but that still falls well below the sort of historical highs of Ackermans when they were around the 25% credit contribution mark. Interestingly, their credit base now stands at 2 million customers, which is, as you can see, a significant base from which to work. Cellular, as a category, continued to grow in significance within Ackermans, up to 24% of total sales, with a 17% increase in handsets to over 3 million handsets sold during the year, and the absolute predominance of those would have been smartphones.
Those strong sales, as Riaan mentioned, meant we were in a very nice clean stock position and bodes well for the rest of the trade this year. There were two significant organic growth initiatives within Ackermans during the course of last year. The first was the relaunch of menswear into 80 shops. Excellent customer reaction, very good sell-offs very early on, so the team will expand that to around 200 stores during the course of the next 12 months. The second more recent intervention is the introduction of a private label beauty offer within their women's category across 400 shops. That is being rolled out in November and December of this year. Clearly, both these categories have significant upside potential for Ackermans, both in terms of top-line sales and in terms of their gross profit.
Moving on to the Speciality division, and this division continues to grow in strategic significance for the group. We expanded our footprint by just short of 60 stores, most of those stores around the brands of Refinery and CODE. Like-for-like at 3% was disappointing, heavily impacted by the poor performance of Shoe City, and I'll talk a little bit more about this brand later, as well as some specific product category underperformance in Refinery in women's casual footwear, but the merchandise teams have already taken the necessary steps to correct the range errors that we made there. Despite the lower like-for-like, we had strong total growth within the division, and that saw us gain market share across most of our big businesses like Dunns, like Refinery, and to an extent CODE.
What was particularly encouraging was the recovery in Tekkie Town, where we've seen their core category of lifestyle and casual sneakers come back into positive growth, and we've continued to grow the penetration of apparel in this business. Tekkie Town, very nice performance during the 12 month. As you can see, strong online growth of 38%, but again, a low contribution overall to the division, although brands like S.P.C.C and AYANA certainly have much higher single-digit contribution in terms of online penetration. Credit growth was strong. We now have a 19% credit mix in Speciality, but if you think about the market segments that a number of these brands trade in and the types of customers that frequent those stores, 19% is still quite a low credit penetration for a Speciality business. They had a number of strategic interventions from organic growth perspective. Riaan alluded to this.
They launched the AYANA brand, 32 stores and an online website at the end of H1, targeted very much at a high-fashion women's wear customer who is still value-conscious and who's looking for a combination of iconic wardrobe items as well as some comfortable casual wear. Very, very good customer reaction from early on, so the team is continually working on enhancing that proposition, and we believe that this brand has potentially some decent white space for us in the years ahead. The second intervention was really around the Refinery brand. Firstly, the launch of RFNRY JNR , so that was a kids' wear range into 10 stores+ online. Again, very successful, significant contribution to the store sales where we put these modules in, and we're looking to expand RFNRY JNR across more stores.
The second was the very recent introduction of an activewear range into Refinery under the OSMO brand. Again, a couple of stores and online, and we've seen very encouraging reaction from customers there. This is really about the trajectory of looking at a Refinery business with a slightly bigger store concept and a wider box with more categories in it than is necessarily found in a normal Refinery. Moving on to Pepkor Lifestyle, we added 43 new stores during the course of the year, mainly Sleepmasters and Rochester stores. Very credible performance of 4.7% like-for-like, and that meant that we saw resultant gains in major categories like lounge, like bedding, appliances, and cellular.
Online sales were particularly strong at 15%, with Home having a 44% growth in online sales, and that lifted the total divisional online participation to 6.2%, with a 9% participation in the tech businesses of HiFi Corporation and Incredible Connection. Again, what was very encouraging here was this sales performance was achieved with a 90 basis point increase in gross margin. This is a significant achievement given the level of competitiveness in the tech space, particularly. Credit sales slightly up about 100 bps to 13%, still well below a number of our competitors in the furniture categories. I guess the message here mirrors a little bit of what Riaan said about the total group. The underlying Pepkor Lifestyle business had very, very strong performance despite the fact that there were a number of strategic interventions within this division that I'll allude to fairly shortly.
Finally, Avenida, clearly a significant growth lever within our international expansion strategy. We have reported at the end of H1 and at the end of last year that there were some underlying slowdown in performance of this business that were worrying us, underperformance of some of the new stores, and that resulted in a deliberate decision to slow down our store openings. As you can see, we opened 19 stores last year. That is against a backdrop of 40 stores the year before. Interestingly enough, we have opened nearly 90 shops since we took over the business in 2022, so we have accelerated the footprint quite quickly given how new it is in our portfolio.
We've also spoken about the interventions that were needed in the product range and in the pricing architecture, as well as in specific product execution in some categories, and I think the positive results of those interventions are clearly visible on the graph. You can see we went from quarter one with around about - 3% like-for-like, about flat in quarter two as some of those initiatives started to take effect, quarter three positive at 2.2%, and then a very strong quarter four at just below 9% like-for-like. A real indication that the team, the merchandise teams, and the store teams have worked hard on the proposition, both from a product perspective and in-store, and the results of that are playing out very nicely from a like-for-like perspective. Credit mix was stable, as Riaan mentioned, a relatively conservative credit granting policy given some of the macros at play.
Our project looking at new store maturities, we've made really good progress using some outside parties. I think we understand the store profiles a lot better. We understand some of the differences between the location types that we've chosen, so we're just doing some more work on getting some of the initiatives in place that can mend some of those issues that we saw in the new stores, and once we're comfortable, we will start to use Riaan's terminology, open the taps again on store openings. We also opened our second distribution center in the northeast province of Pernambuco. That will reduce our distribution costs in the northeast and the north significantly, and we have about 40% of our stores that are located in that area, as well as add capacity to the network, which obviously will help us when we start to open stores again.
That concludes the business as usual and the organic growth initiatives of retail core. Let's look at some of the detail behind the strategic interventions. As Riaan mentioned, Choice Clothing, this acquisition was completed at the end of H1. Reminder that this is our access as Pepkor into the very fast-growing off-price segment within the market. Small acquisition, it's 105 stores, but we believe it has significant growth opportunities. The focus right now is really on creating a platform and a foundation for growth, so integrating it into our Pepkor supply chain, making sure it's got the right systems and processes, injecting some capacity into the team. What you'll see during 2026 is probably a fairly moderate expansion of stores, but once we hit 2027 onwards, we should accelerate to what we believe is well in excess of 300 stores potential in South Africa.
Moving on to Pepkor Lifestyle, the Shoprite Furniture transaction, you'll recall we announced at the end of last year. Now, different timing and different processes of each territory's competition commission has meant that we've decided to do a split implementation. The non-RSA territories of Botswana, Lesotho, Namibia, Eswatini, and Zambia were implemented in October of 2025. That's about 66 of the 400 shops, but quite a significant component of both the turnover and the profitability, given that these particular regions or territories trade very well. Like with any new acquisition, the focus right now is integrating this business into Pepkor Lifestyle, both from a systems perspective and then migrating people, credit books, insurance sales, and the likes into the Pepkor Lifestyle framework, and all of this has proceeded fairly seamlessly since we completed that element of the transaction.
As you will have read in the press, one of our competitors made a late attempt to intervene in the process. That matter is still going through the various regulatory steps, but we believe that we'll have clarity in the coming months, and our aim is still to implement this transaction in full by the end of this financial year. The other smaller strategic intervention was Lifestyle taking over the Boardmans online business that was acquired when we did the Retailability transaction. Just a reminder, there are no stores related to Boardmans. It's simply a Boardmans website and the brand, and we think that that gives Pepkor Lifestyle some interesting optionality as they expand their online commerce capability across the segments of furniture and tech. Finally, the retail acquisition of Retailability assets, which was Legit, Swagga, and Style. That transaction was completed on the 2nd of November.
A reminder, it's about 470 shops, including the very key asset of 250 Legit stores, which form a big part of Pepkor's stated intent to grow our share in womens wear going forward. The opportunity that we have with this transaction is to leverage a number of Pepkor assets being sourcing, our supply chain, our back office, our financial services, and cellular capabilities, and that will drive growth not only at a sales line but at a profitability line in these businesses. The other opportunity we have is to take the smaller brands that came with this acquisition, being Swagga and Style, and being able to consolidate those with some of the existing smaller brands within Speciality so that we end up with a Speciality division that has fewer brands and formats but brands and formats that are of more significance both to the division and the group.
Speaking to that point, I think we've said all along part of our capital allocation strategy is always evaluating existing assets. You've seen us close deals. You've seen us exit PEP Nigeria, close Ackermans Women's, and dispose of the building company. We've looked at the Shoe City business. We've tweaked and changed elements of this business for many years since we've owned it, but we really have come to the conclusion that this specific format and this specific brand doesn't show significant upside potential for us in terms of growth going forward. In order to keep the team focused, we've decided to close this business. It's about 114 stores. Fifty out of those stores will be converted into other group formats, and the balance of the stores will close as they come to the end of their leases.
All of the staff have been accommodated in other Pepkor brands, so there's no implication in terms of people, and our target is to exit this business by the end of January next year. Moving on to the second growth lever, which really relates to group scale and capabilities in areas like sourcing, data, and tech and supply chain. If you were ever in any doubt as to our scale, some of the numbers on the slide hopefully convince you. More than 1 billion units flow through our network every year. Transport and distribution vehicles travel more than 28 million kilometers every year, and we ship more than 20,500 2040 equivalents in terms of containers every year. Really a business of significant scale.
If we break that down from a sourcing perspective, really the focus is on leveraging our own sourcing capability in Far East that we built some years ago and trying to move more and more to a sourcing model that is direct to manufacturer. That clearly gives you advantages in margin and advantages in price competitiveness, but it also gives you much better supply chain and value chain visibility. During the course of last year, we grew the units through our PPS office in the Far East by 12%. That was nearly 150 million units that flowed through that sourcing office, and that included adding in new categories like footwear and general merchandise. In addition, our focus on growing our local sourcing continues. We sourced 235 million units out of the local market last year.
That makes Pepkor by far the largest procurer of product from the South African market. If you look at some of our bigger businesses like PEP and Ackermans, more than 40% of the volume that they do in some of their core categories is sourced from South Africa where those categories are available. Moving on to logistics, a couple of projects. The first key project was really taking the volume that we have in our PAXI business, so those 7.1 million parcels, and combining it with the existing in-house courier and last-mile distribution capability we have within Pepkor Lifestyle. Before, a large proportion of the 7.1 million PAXI parcels where last-mile distribution happened via third-party couriers, that volume has all been moved into internal courier services that Pepkor Lifestyle offers, and in that way, the profit leakage that was going out to those third-party couriers is brought in-house.
In addition, the Pepkor Lifestyle team have invested in their Jet Park distribution facility with extremely automated sorting operations that will help us improve the efficiency on our PAXI business significantly. The result of that will be savings not only for Pepkor Lifestyle but also for the PEP business. Linked to that capability of last-mile distribution, at the moment, all of our online businesses, each brand runs their own online business and has their own dark store and therefore takes care of all of their online fulfillment. We believe that as a group, we should be pulling that all centrally into one dark store and trying to leverage all of the volume through one distribution network or distribution pipe. We are integrating, firstly, Speciality brands.
All of those brands have now been brought into the Pepkor Lifestyle facility, and all of the online fulfillment is being done by Pepkor Lifestyle. Once we've got that better done, we'll then look to the bigger brand like Ackermans to see if we can integrate them and the PEP business as they grow online. Finally, from a data and tech perspective, clearly we are always looking at ways to use data and technology to enhance how we deal with our customers. We currently have 31 AI models running across the entirety of our business using large language models, using GenAI to do content generation and to use agentic AI in a number of our businesses, but we'll explain a lot more of this at our Capital Markets Day.
Moving on to the third growth lever, which again, as I said, is all about omnichannel and leveraging this unique capability that we have of formal market, informal market, and digital channels and serving our customers seamlessly across those. If you think about our omnichannel presence, we have 6,000 physical stores, as you know. Interestingly enough, that's more than Ikea, Primark, and Target combined, so it's a significant footprint, and it's clearly the primary place that we see and serve our customers. We have our digital channels. There are 17 websites where each brand is responsible for managing the relationship with their customers and the transacting with their customers online, and those channels continue to outpace our physical retail growth.
At a group level, we have +more, which you'll recall is our digital rewards program that we launched less than two years ago, and that sits centrally. Finally, we have our Flash business in the informal market, which is the last channel, fastest growing segment of the market, and we have 170,000 traders there. Ultimately, the ambition is to see can we serve a customer across all three of these channels. If you think that I've had something to drink before this presentation, I can give you a practical example of that. Think about data and airtime. If there's a customer right now who wants to top up their airtime or their data, they can go into one of our physical stores and they can buy a data and airtime voucher from one of the people in the stores.
Equally, if they are closer to home and they want to buy it within the informal market, they can go to one of our 170,000 Flash traders and they can buy the same airtime or data voucher from that trader. As of December, if they're sitting in the comfort of their home and they want to do it digitally, they'll be able to go onto their +more app and they'll be able to buy data and airtime on their +more app. Really, our ambition is to say if we can do that with data and airtime, how many other products are there that we could potentially serve our customers through all three of these channels? What have we done in the last 12 months to expand our omnichannel opportunity?
As you saw earlier, nearly 270 stores opened, so we continue to expand our physical store footprint. From a digital and online perspective, the brands continue to invest in upgrading their website platforms and increase their marketing investment in terms of driving online sales, and the net result was that our group online sales were up 17% year on year. More significantly, we launched our first PEP business online during November, so PEP Home went online. We saw an incredibly quick take-up from customers, and I think around about 5,500 orders literally in the first week or two, and we really believe there's significant upside potential with PEP Home being available to customers online.
From a +more perspective, the program grew by 8 million members, so we now have 13 million customers who are members of our +more program, and this is a key digital channel that we can use as a group to communicate value and provide benefits to our customers across all the brands. From an informal market perspective, this market segment just continues to thrive. Throughput was up 23% in Flash to an incredible ZAR 60 billion, and given that Flash is an existing business unit, I'll give you a little bit more detail on the performance of Flash in this slide. As you'll remember, Flash has three core components to its business. The first is a trader business, and what you can see from the slide, our trader base was relatively stable at 170,000 traders.
We injected a number of new acquiring devices into the market, so we have nearly 70,000 acquiring devices in the market that we've distributed, and that really is in response to the continued evolution that we see of customers moving from cash to other payment forms. The net effect of that was our tapped value through those acquiring devices was up 38% to a very credible ZAR 21 billion. The second part of the Flash business is the aggregation business, and this has two sort of subsets. Firstly, Flash uses their scale to procure and onsell commodities such as airtime and data and electricity to their customers, but the second part of it is it has developed and uses a system platform to sell not only its own vouchering products but enabling other partners in terms of what they want to do with vouchering.
If you look at aggregation throughput overall, it grew 70%. It now makes up 37% of Flash's total throughput, and this was primarily driven by strong sales in vouchers and in airtime. The other thing that the vouchering platform is doing is now driving additional revenue because they can use that vouchering capability to provide solutions for non-competitor third parties to run their own vouchering processes on a white label basis. Those aggregation capabilities also meant that we were able to facilitate around 350,000 SASSA grant payments every month via our Flash trader network, and that clearly solves a significant customer problem in the market.
Finally, the cellular division, that's really where we distribute SIM cards through the informal market, our active customer base up to 3.3 million customers with an active SIM, and we saw marginal base growth, a base spend growth with about ZAR 3.8 billion worth of base spend in the Flash business, and that contributed very significantly to the OGR numbers that Riaan shared with you earlier. I'll now hand you over to Garth to take you through the final growth lever of financial services and connectivity.
Thank you, Sean, and good morning, everyone. When we look at our financial services and connectivity, we've managed to scale this driven by our core retail offering over the last 12 months. We now have over 3.5 million A+ accounts, giving us the largest credit book in terms of number of customers in South Africa.
Our FoneYam, our device rental product, has over 2 million agreements in place, and our insurance business now covers over 1 million lives. We've managed to develop some key capabilities leveraging off our retail business to drive customer acquisition, collect payments, and process various transactions. If you look at our acquisition capability, in any month, we're able to open over 100,000 new A+ accounts. We sell over 1 million cell phones, which is over 4,000 cell phones in the same time you'll take to listen to these results. We register over 780,000 new SIMs, and we sign up over 174,000 new FoneYam customers. Our collection capability ensures that we collect over 2 million A+ account payments, 590,000 FoneYam payments, and we process over 4 million bill payments on behalf of third parties.
Customers see our stores as a trusted place to make payments for everything from DSTV, municipal accounts, and third-party insurance. We have built a platform that allows our customers to send over 500,000 PAXI parcels a month, 2 million money transfers, and over 500,000 customers avoid long queues at ATMs and withdraw cash at our point of sale. This is really built on the 6,000 stores which we've spoken about, which are all Wi-Fi enabled, and we now have biometrics available in stores to assist going forward. When we look at our retail credits, retail credits have been a key enabler of our merchandise sales, and as Riaan has highlighted, just over 16% of our sales are on credit. Over the last 12 months, we have managed to open over 1.3 million new A+ customer accounts.
We have seen an increase in the number of customers who are able to buy, which has increased to over 74%, and our credit risk has been well managed, and we have seen a 50 basis points reduction in non-performing loans. We now open over 34% of all new accounts in South Africa, and what is most exciting for us is that we've been able to financially include 48% of our new account customers; this is their first retail account. Our strategy of driving interoperability for our stores has enabled us to drive sales across our wider business with ZAR 3.8 billion in additional sales in FY2025, with cross-shopping across all of the key businesses. Connect, which is our retail credits offering in lifestyle business, has also seen good growth in the number of accounts with improvements in collections and a reduction in non-performing loans.
We have also now successfully onboarded the non-RSA credits and insurance books of OK Furniture and House & Home. When we look into the cellular business, we've managed to continue delivering strong performance in cellular, which has increased handset sales to over 13.5 million handsets, a 17% growth in last year. We are driving digital inclusion with over 65% of these handsets being smartphones. Our own brand cell phones, which make cell phones more affordable for our customers, have a 25% market share in the prepaid markets and have grown by 22% in the last financial year. Our SIM base is now over 31 million customers, a growth of over 6% on prior year. This has enabled us to grow our ongoing revenue by 9.5% to ZAR 2.1 billion. We have expanded our market share in prepaid handsets and now sell 8 out of every 10 handsets in the country.
Our growth in cellular has been enabled by FoneYam, our device rental business, which has increased from under 800,000 customers at the end of FY2024 to over 2 million customers at the end of this year. Over the past 12 months, we have been able to open an average of 174,000 new contracts per month. This has been driven by expanding the range of phones that are available for rental, increasing the number of stores in which customers can sign up to over 3,500, and FoneYam now accounts for 16% of all handsets sold, with over 53% of Samsung sold in our stores being sold via FoneYam.
Going forward, we'll focus on offering existing customers the ability to extend their rental agreements to a longer term, which will allow them to trade up and hopefully reduce our risk profile, as this will only be available to good-standing customers. Our insurance business has scaled in the last year and increased revenue by 78% to over ZAR 829 million. This has been driven by embedded products in PAXI and FoneYam, with 7.1 million parcels covered for theft and 1.9 million handsets covered for damage, theft, debt, and disability. We now have 622,000 bundled insurance products, which cover ZAR 7.1 billion credit life and 2.2 million goods covered. We have now exited our partnership in funeral, and 100% of all new funeral policies are underwritten by Abacus, and we now cover over a million lives with ZAR 19.7 billion funeral cover for our customers.
We have already made strides in meeting our customers' financial services needs. We want to continue to make it easier and cheaper for our customers to transfer money, get access to credits, pay their bills, get access to smartphones, and enable them to carry out many banking transactions in our stores. As a result, we already process over 2 million money transfers a month, over 4 million bill payments, over 22 million cash withdrawals, and 22 million cash deposits. We issue over 65,000 personal loans and, as mentioned previously, 174,000 phone rentals. We will continue to look for ways to make financial services more accessible and more affordable for our customers. With this in mind, we believe we have an opportunity to make banking more accessible and affordable for our customers. We already meet many of our customers' banking needs, as outlined in the previous slide.
We have demonstrated an ability to acquire customers. With over 32 million known customers, we complete 16 million RECAs in a year, we process over 7 million credit applications, and over 2 million FoneYam rental agreements. We have already made significant progress in establishing our banking capabilities. As mentioned earlier, we've received our Section 13(1) approval from the regulators. We've also made an acquisition of a proven core banking capability with the CloudBadger technologies acquisition, and we believe that by leveraging our trusted brands, retail footprints, good customer service, and low cost of doing business, we can meet our customers' needs for accessible and affordable banking. Thank you. I'll hand over to Pieter to give us the outlook.
Thank you, Garth, and Sean and Riaan for, I think, explaining a very credible performance. Clearly, Pepkor has got great momentum. The business we feel is in a very good place, and we are pleased to say that the trading post this financial year has also been according to our expectations. It is not our biggest months, being October and November, because Black Friday is still coming and Christmas is still coming and back to school, which are all significant trading periods, but we do track how we were doing against last year, and that's according to expectations. We're very aware of the two pot that stimulated some of the sales last year, so we've planned accordingly. As Sean mentioned and Riaan as well, we got very good, healthy stock levels. The ports are open, and the full price sales seem to be holding up.
What are we up against? This set of fantastic results. Pepkor has established a good strategy with revenue streams that stretch beyond what I would call traditional retail, especially in the last presentation from Garth. You would have seen how we try and meet our customers' needs, which are not just goods but also services or fresh airs, as I sometimes refer to it, but those are real needs of the customers that we are enabling, and we think we are on a good path in doing that. What are we planning to do? We obviously need to open the stores in terms of the normal strict metric that we apply with good returns. Obviously, that's quite predictable for us, especially in the traditional formats. With a high level of confidence, we can predict how those stores are going.
We're still working on that through in Brazil, but mostly in South Africa, that's well bedded down. The M&A, it's always disruptive or potentially disruptive with the new formats that's coming in with the new M&A, but we feel we have the capability, and we've invested in the right number of additional people and systems in order to deal with that. The FinServ expansion, as you can see, that is going very well. Lastly, we want to unlock more value out of the informal market, especially with Flash. We do recognize that some of our investors don't want to invest in a sort of a fintech business via a more traditional retailer, so we are looking in ways to unlock that value as well for shareholders. We will finish up with that, and now we'll try and answer the questions that's come in over the presentation.
Thank you very much for attending.
Morning again, everybody. Quite a few questions to answer. I'm going to start with three main categories of questions that we've received. The first one is specifically around the growth in the books. Firstly, a question was asked, yeah, we thought it was going to start slowing down, but it's still picking up. Secondly, a view overall on how do we see the growth or the 30% that I quoted playing out in the new year. The first one on the, yes, we still did see a higher growth towards the end of the year. We have rolled out more canvases to more stores during the year, specifically in the PEP environment and some of the Speciality stores, which did help to grow the number of new accounts towards the last part of the year, specifically in the last quarter.
It did overachieve both on an A+ account, but also on, as we mentioned, on the FoneYam side. Guidance on how do we get to the 30%? I'll try and cover the main books on A+. You saw it ended up ZAR 9.2 billion. We anticipate that's going to get to at least ZAR 11.5 billion in the new year. Capfin, roughly, ended about ZAR 4.5 billion. We anticipate that's going to be around about the ZAR 5.5 billion, again driven by a move to more 12- and 24-month loans. On the FoneYam side, that we said earlier is now sort of stabilized. Remember, that's predominantly a 12-month product. We are looking at an 18-month product as well, so it recycles quickly. There, you would have seen it ended up just below the ZAR 2 billion. We anticipate that will go up to about ZAR 2.5-ZAR 2.6 billion.
Avenida, not a big growth again, and a connect more or less in line with what you saw this year, slightly higher. The one thing that you must take into account is with the acquisition of OK Furniture, there is a book that we've acquired outside the country, sitting outside of South Africa. That was included in the 30% growth that I quoted. That is a rough guidance on the book overall. Again, still, methodology has not changed, still very much the same, still conservative on the A+ side on how we grant credit, but it is purely a volume issue with more canvases in stores and more stores, and also in the Speciality side, we've opened more stores where they can open new accounts. Second question was around guidance on GP margin. First, how do we see that playing out?
Yes, we saw a big increase this year in the fintech side specifically. Looking at clothing and general merchandise, we do anticipate that it'll stay more or less at the same level because firstly, we do see cellular still growing faster than normal CFH sales in the new year, which, as I said, it's got a slight dilution. On the other side, we do anticipate with closure of Shoe City, etc., that on the Speciality side, there'll be an improvement. As I said, last year, the GP margin in Africa and Avenida dropped because of currency. Indication thus far is that especially the real is actually strengthening against the rand, so it will go in the opposite direction. If you take everything into account, it'll stay the same level. Similarly, on the furniture and appliances segment, don't see it really moving significantly.
On the fintech side, again, we do anticipate an improvement there. FoneYam is still growing, and remember, FoneYam is a fixed GP amount, not impacted by interest rates. Where on A+, it will have an impact, a drop in interest rates. There, we will see a drop, as I said, probably neutralized, the current indication by the FoneYam growth. It is all a slight increase there, not to the extent that we saw this year. Overall, 10-20 basis points improvement in the new year. There was a question on EBIT margin around the comment of the 12% and when we will get there. As I said, we are aiming for year two and three.
I think what is important to note, and we did guide this last year already, the acquisition of the furniture side will mean that initially there will be a drop in the EBIT margin. Similarly, with the acquisition on Retailability, it will initially come in at a slightly lower EBIT margin than what the rest of Speciality is running at. Part of the consolidation process that we said we're going through in Speciality and the integration the next two years on the furniture side, we do see that it will get back to the 12% at the end of year two, probably more into year three, current models indicate. I'll hand over to Sean now to cover some of the other questions.
Thanks, Riaan. A few questions of a general nature. A lot of questions about our post-trade numbers and specifically what those numbers look like, excluding various acquisitions that were made. Just to be clear, the numbers that we published were actually excluding any of the new acquisitions that were in place. A reminder, it was 5.3% growth against a base of 14.6% in the previous year. There was a request for a breakdown in CGM versus our furniture segment. In CGM, the growth was 5% in the post-trade period against a base of 16.2, and in the lifestyle business, which is the furniture and tech business, a growth of 6.8% against a base of 5.8%. I guess the point to make here is if you think about the three acquisitions that we made, the lifestyle acquisition was only implemented in October, and that's only 66 stores.
The Choice acquisition is 105 stores, and the Retailability assets that completed on the 2nd of November. None of those really will move the dial to any great extent in the post-trade period. There are a lot of questions about the OK Furniture transaction and the Lewis Group challenging that transaction. As we said in the presentation, this matter is sub judice at the moment, so we can't really go into a lot of detail. There was a question about the 50% market share that Lewis have alluded to. We believe that Lewis's definition of the market is very narrow. They are focusing only on high credit-based retailers. If you look at our businesses, we have a credit participation of 13% and a much wider definition of the market, which we believe drops as well, well below the 50% they refer to.
We think that's kind of borne out in the fact that the constitutional and the court and the, sorry, the Competitions Appeal Court found in our favor. We believe that that backs up our argument. As has been reported in the press, the matter has been referred to the Constitutional Court. Lewis have applied for leave to appeal, and fortunately, the Constitutional Court is treating the matter as urgent. As I said in the presentation, we expect to see resolution relatively quickly and have clarity on the outcome of that. Third question around acquisitions. Again, I'll refer to the growth levers that I pointed out in my presentation. The reality is all of our acquisitions and the four acquisitions that we did this year, the three retail ones plus CloudBadger, were all specific targeted acquisitions.
All acquisitions have a full VCP or value creation plan built around them. There's deep due diligence that's done, and we obviously look for synergies that we can unlock within the Pepkor group. We run full DCFs. We run base cases. We run upside cases. We look at the IRR, and there was a question around IRR. Generally, we're looking to be well in excess of WACC. Some questions about acquisitions that are currently being considered. As you can understand, we can't really disclose much detail about those, safe to say that they will all align with our strategic growth levers and that we continue to evaluate them as we go on. Finally, just a question on Ackermans menswear and how that differs to the previous Ackermans menswear range. Simply, it's a much smaller, tighter range, focusing on kind of core basics and core essential items.
We'll take a little bit less space in store and be slightly smaller than previously. I'll just hand over to Garth to deal with some of the other questions.
Thanks, Sean. Morning, everyone. There were a couple of questions around banking, a question around FoneYam and what happens after 12 months, and then a question around Flash growth opportunities. I think on the banking side, let's start with the elephant in the room. We have not agreed a partnership with anyone. As highlighted in the results presentation, we have Section 13 approval. We, as a team, will unpack at Capital Markets Day a lot more detail around who are we targeting as customers, what is the banking proposition, why do we think we have a right to win, and what's the customer need we're trying to solve. We'll give you a full unpack there, but wanted to reiterate we haven't agreed partnership with anyone in the market.
Secondly, on FoneYam, what we are seeing is obviously after 12 months, a lot of customers choose to settle their rental agreements. We believe that we're getting in excess of double digits of the customers signing up for new contracts. Our new contract that we offer customers is a longer-term contract, which allows customers to trade up. On the Flash side, the focus is not on international expansion. We believe there's still significant opportunity in the South African market. As Sean outlined, we've made significant progress in the aggregation business. We think there's an opportunity on the direct-to-consumer space as well. The focus is going to be on growing in South Africa rather than international expansion. I'll hand over to Pieter.
Thanks, Garth and the team. Maybe just one more word on the banking, as it seems to have received a lot of airtime. The platform that we acquired called CloudBadger after year-end and the team that comes with that is actually a key ingredient to developing this opportunity. We think that this has put us in a very good position. We are going to, as Garth said, give you some proper feedback at the Capital Markets Day and just remind you of the days again, 30 and 31st of March next year in Cape Town. Thank you for all your attendance today. I think we had a record attendance, is the feedback that I've got, almost double what we usually have. Hopefully that's a good sign. Thank you for your attendance and good day.