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Brown & Jackson, which houses Pepkor's retail holdings in the UK, produced excellent results for the six months to the end of December 1999. Operating profit before exceptional items showed a sharp increase of 39% to 31,6m (R313m), while earnings per share were boosted 21% to 14,75p.

Pepkor acquired the loss-making Brown & Jackson with its wholly-owned subsidiary Poundstretcher in 1994 after gaining a foothold in British retail through Your More Store, established in Scotland in 1991. In the twelve months to June 1998, Brown & Jackson reported a profit for the first time in seven years.

Brown & Jackson MD Johan Visser said the 39% rise in operating profit on a 15% turnover increase to 225,4m (1998: 196,3m) highlighted the further improvement in operating efficiency. All three operating units - Poundstretcher, Your More Store (YMS) and What Everybody Wants (WEW) - performed better compared to the previous period. Poundstretcher grew operating profit by 45%, YMS by 15% and WEW by 51%.

The group's tax burden increased significantly from 1,9m to 6,8m as the benefit of previous tax losses began to decrease. Despite the heavier tax burden, profit after tax increased by 21% to 24,3m. It is group policy to declare a dividend once a year.

Due to a rapid expansion programme Brown & Jackson opened 56 stores and closed three during the period under review and the group now trades from 574 stores.

Visser said the group would, in the light of the solid results, continue its aggressive expansion programme. "Sales for the first seven weeks of the new period grew according to budget and we are confident that we will make further progress in the second half of the financial year," he said.

Pepkor and Brown & Jackson chairman Dr Christo Wiese said the company was well positioned to sustain a high growth rate and rapid expansion. "The company's profits are still rising and the recent acquisition of North Shoe is proof of the opportunities that exist for the group."

North Shoe, a fashion and footwear retail chain trading as "The Famous Brunswick Warehouse" from 32 stores, was acquired by Brown & Jackson for 22,9m earlier this year.

Since the beginning of the year Brown & Jackson has also opened four pilot stores in Poland. The company indicated earlier that it was investigating the possibility of expanding to Eastern Europe.

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