JOHANNESBURG - Household furniture and appliances retailer Lewis Group said on Wednesday it continued its turnaround in the six months to September, with headline earnings per share increasing by 10.7 percent to 180.8 cents on the back of strong merchandise sales growth.
Lewis declared an interim dividend of 105 cents per share, up five percent from the same period last year.
It said merchandise sales rose 25.9 percent to R1.6 billion, boosted by the recent acquisition of United Furniture Outlets (UFO).
“We believe UFO is scalable with the potential to expand across South Africa and into neighbouring countries," chief executive officer Johan Enslin said.
"Two stores were opened during the first half, another three stores opened in October and two more outlets are planned to open before December.”
Lewis's store base increased to 779 following the opening of 14 stores and closure of eight during the six month period. The store base in neighbouring Botswana, Lesotho, Namibia and Swaziland increased by six to 116.
Enslin said the current sales momentum was expected to be maintained, with UFO complementing the performance of the traditional retail brands.
The change in the affordability assessment regulations of the National Credit Act had enabled self-employed and informally employed individuals to again apply for credit.
"We expect this to improve the performance of our stores in rural areas which have been most affected by these restrictive regulations," said Enslin.
"While it will take time before many of these individuals re-enter the credit market, sales to this customer category are encouraging and early payment performance is satisfactory."