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SIMON BROWN: I’m chatting with Sean Wibberley, the CEO of HomeChoice International. Their full-year results ending December reveal a 20.6% increase in revenue, HEPS up by 27.3%, and a dividend rise of 16.9%.
Sean, I appreciate you joining me today. Let’s begin with your retail sales segment, which is arguably the traditional heart of your operations. Revenue there grew by 8.3% to R1.3 billion. It’s still about a third of your overall business, yet it’s thriving despite a tough consumer landscape?
SEAN WIBBERLEY: Thank you for having me. The retail sector has seen a significant revival in recent years. Last year, it returned to profitability, with the bottom line—PPT—climbing approximately 85% to R50 million. This turnaround has been fueled by a marked improvement in customer quality, thanks to new credit models and an expansion into small-format showrooms where customers can physically interact with products. We expanded our showroom count to 37 last year, and we aim to reach 60 this year, ultimately tilting towards 100 within a few years.
For the first time in HomeChoice’s history, customers value the chance to touch and feel the products rather than relying entirely on catalogues or online shopping. This has resulted in fantastic engagement through that channel, and we’re very excited about it.
SIMON BROWN: From what I understand, these touch-and-feel showrooms are quite a fascinating initiative you’ve launched. They must enhance the selling experience significantly. How many products can you accommodate in those relatively compact spaces?
SEAN WIBBERLEY: Indeed, they are small-format showrooms. We initiated this showroom strategy a few years ago, previously employing larger formats to showcase a variety of products. Our current small-format showrooms measure about 250 square meters, yielding four times the trading density. When customers visit, we feature seasonal items—such as blankets—allowing them to touch, appreciate the quality, and examine the patterns.
We present various bedroom styles in curated setups, enabling customers to visualise the arrangement before placing an order online or through an in-store assistant. The selected products are then delivered a few days later for collection at the showroom.
SIMON BROWN: One of the major growth segments is Weaver Fintech, which is relatively new for you. Let’s start with PayJustNow. It appears people are starting to find it familiar. You’ve collaborated with well-known brands and are witnessing strong adoption.
SEAN WIBBERLEY: Yes, the buy-now-pay-later movement that began internationally a few years ago has gained significant traction in South Africa. The adoption rate of PayJustNow is remarkable, with over 100,000 new customers joining monthly. This viral spread is largely fueled by word-of-mouth; customers are eagerly sharing this intelligent shopping option with their friends. They can pay a third upon purchase, another third a month later, and the final third on their next payday. There are no extra costs for users, as they simply split the total into three. It’s an incredible option.
This viral growth allows us to onboard new customers into our ecosystem, where we can utilise their digital information to cross-sell our other financial offerings, including lending and insurance.
SIMON BROWN: What caught my attention is that while most buy-now-pay-later services have been online, you’re also offering it in physical retail locations, such as Pick n Pay Clothing Hypermarket for various appliances, etc.
SEAN WIBBERLEY: That’s correct. In stores like Game and Cape Union Mart, customers can enroll for PayJustNow using their app, linking their debit or credit card to the service. At checkout, they can simply scan the PayJustNow QR code to complete their purchase and leave with their items.
SIMON BROWN: I understand. Another aspect is FinChoice, which provides short-term loans. You mentioned it’s similar to having a credit card on your smartphone. They also offer longer loans and funeral cover—how is that segment performing?
SEAN WIBBERLEY: Absolutely. FinChoice has been operating for 18 years and is considered an ‘adult’ this year. Our MobiMoney product represents about one-third of our disbursements in short-term loans—typically lasting three months—accessible solely via smartphones.
We also provide loans ranging from six to 36 months, which cater to personal loans for more extended periods and larger amounts intended for responsible customers. We’ve developed a strategy to progressively walk customers through our product range to ensure they use credit responsibly.
In this sector, we are able to leverage our PayJustNow customers to offer them credit, as well as our funeral and personal accident policies.
SIMON BROWN: What is the current situation regarding bad debts? There have been many reports indicating slight improvements in the consumer landscape recently, but South African consumers have endured tough conditions for several years.
SEAN WIBBERLEY: That’s accurate. A significant advantage of our business model is that we operate as a relatively short-term lender compared to our competitors. Our acquisition products for first-time credit customers usually have terms of three to six months. This enables us to swiftly address any emerging bad debt issues, whether a result of macroeconomic developments or errors in our scoring models. Furthermore, we can react quickly as market conditions change, which can impact our risk metrics.
While longer-term lenders might face challenges in managing clients over several years, we can adapt more readily. Nonetheless, it is true that the South African consumer has encountered obstacles, ranging from Covid to increasing interest rates, along with discussions about a potential two-percentage-point VAT hike. I’ve been frequently asked how we navigate these macroeconomic issues—and while we acknowledge them, our focus lies in understanding our customers, their payment behaviours, and their evolving affordability, adjusting our marketing and products accordingly.
SIMON BROWN: As you pointed out, this capacity for rapid response, along with your insights into customers transitioning from PayJustNow to FinChoice, is crucial.
We’ll conclude here. Thank you for your time, Sean Wibberley, CEO of HomeChoice International.
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