Lewis Group declares dividend despite negative Covid-19 impact
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JOHANNESBURG - Furniture retailer Lewis Group said on Tuesday it had delivered a solid trading and operational performance for the year ended March before being impacted by Covid-19 and a nationwide lockdown which contributed to headline earnings per share declining by 30.8 percent to 260 cents.
The company said Covid-19 adjustments reduced profit before tax by R339 million and headline earnings by R224 million.
This included an increase in the debtors impairment provision of R123 million as a result of lost collections in March due to store closures during the lockdown, a further increase of R190 million in the debtors impairment provision for the potential economic disruption of Covid-19 and its impact on future customer account payments and an impairment charge of R27 million for the possible future impact of the coronavirus.
Despite the financial effects of the health pandemic, Lewis declared a total dividend of 185 cents per share for the year, although this was down from 234 cents in 2019.
"The strength of our balance sheet and cash position ensured that we did not need to access any bank funding during the lockdown period, despite all our stores being closed for an extended period,” group chief executive officer Johan Enslin said.
The retailer lost crucial trading days over the March month end period at the start of the lockdown, resulting in it losing merchandise sales of approximately R80 million and customer account collections of R180 million.
Lewis expanded its store footprint to 794 following the opening of 19 and closure of 9 stores during the year. The group plans to open 20 new stores in the 2021 financial year.
Enslin said sales had been strong following the reopening of stores from June 1 when the government relaxed Covid-19 restrictions.
“The current sales momentum is being supported by pent up demand from savings accumulated during lockdown," he said.
"We are expecting consumer spending to contract in a post Covid-19 recessionary environment. Customers in our traditional lower to middle income target market are also vulnerable to the rising levels of unemployment in the country due to the impact of the pandemic."
African News Agency