Cape Town - Listed home shopping retailer Homechoice International said on Monday it had overcome weakness in the consumer economy to lift revenue by 15.6 percent, from R861 million to R995 million, in the six months to June.
The largest home shopping retailer in southern Africa – which offers products through online channels, call centres, sales agent networks and mail order catalogues – said headline earnings increased by 8.5 percent, from R158 million to R172 million. Explaining the lower rate of improvement in this figure compared with its top line, the company pointed to a number of factors, including a lower gross profit margin and higher retail debt write-offs.
Malta-based HomeChoice International is the holding company of HomeChoice and FinChoice, which sell homewares, personal technology and loan products to the rapidly expanding middle income mass market in southern Africa. The company said cash generated from operations was up 26.6 percent to R123 million in the period under review thanks to “a strong focus on cash collections and more efficient management of working capital”.
The company, which listed on the JSE in December last year, said headline earnings per share came in at 169.8, up from 157.1 last time, and an interim dividend of 64 cents per share was proposed, an improvement on 61 cents last time.
Shirley Maltz, chief executive of the South African operations, said: “Our fastest growing channels are our digital channels (web and mobi), where sales increased by 26 percent to 11 percent of retail sales. We continue to drive growth in these channels through investment in teams and platforms.”
HomeChoice trades in five countries outside South Africa, contributing 10 percent of retail sales, and sees further growth opportunities. “Our omni-channel home shopping retail model and digital financial services business provide a strong platform for growth in Africa,” said Maltz.
The company said FinChoice maintained its strategic focus on short-term, low-value personal loans to HomeChoice customers. Loan disbursements increased by 22 percent to R542 million, with 73 percent of loans extended to existing customers. The customer base increased by 9.3 percent to 126 000 in the six month period.
Maltz said credit conditions remained challenging and group debtor costs grew by 19.5 percent, owing mainly to the increased retail debt write-offs following last year’s Post Office strike, which negatively impacted customer payments and collections.
The group said it was spending R100 million on building a new 1 000-seat call centre and retail showroom.
ANA