JD Group swings to loss, halts dividend

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Johannesburg - South African furniture retailer JD Group swung to first-half loss and suspended its dividend, hit by a near-doubling of money set aside to cover customers' unpaid debts.

JD Group, which sells beds, sofas and electronic equipment to mass-market customers who often buy on credit, said that the headline loss per share totalled 59.1 cents in the six months to December 31, against earnings per share (EPS) of 234.4 cents a year earlier.

Headline EPS, South Africa's main profit gauge, strips out certain one-off and non-trading items.

The company, majority-owned by Europe-focused furniture maker Steinhoff, said it would not pay a first-half dividend because of the poor performance.

JD Group increased bad-debt provisions to 1.6 billion rand from 966 million rand in June last year.

South African consumers have been squeezed by inflation and higher petrol prices in particular, caused by the weakness of the rand, with nearly 50 percent of borrowers failing to pay loan instalments for at least three straight months last year.

“Customers are facing continued pressure on disposable income due to increased living costs and higher debt-to-income levels, impacting spending on furniture and household goods,” JD Group said in a statement. - Reuters

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