Lewis revenue growth reflects the benefits of change
The furniture retailer said credit sales increased 8.1 percent for the year, with growth of 11.3 percent in the second half, reflecting the benefits of change in the affordability assessment regulations on the group’s traditional retail brands which are Lewis, Best Home and Electric, and Beares.
“The changes in the affordability-assessment regulations, which enabled self-employed and in- formally employed individuals to again apply for credit, will continue to benefit sales into the new year,” the retailer said.
Lewis said that merchandised sales accelerated 22.9 percent to R3.5 billion. They were lifted by the acquisition of United Furniture Outlets, which have contributed sales of R478 million in its first full year in the group.
It said INspire, the new omni-channel home shopping retailer, continued to grow month-by-month and generated R27.2m in its first 10 months since launch.
“The turnaround in the performance of Lewis Group’s traditional retail brands continued to gain momentum, while the group has also started to reap the benefits of its strategy of diversification across market segments and retail channels,” the group said.
The company said its total revenue rose 12.4 percent, while gross profit margin shot up 41.2 percent .
It said debtor costs reduced by 11.9 percent, operating profit was up 16.8 percent, headline earnings per share up 24.3 percent and provided a 17 percent increase in total dividend to 234 cents per share.
“Lewis, a very good update,” said First National Bank Wealth and Investments analyst Wayne McCurrie.
The group’s store base increased to 784, following the opening of 30 stores and closure of 19 stores during the period. It said it continued with its strategy to open smaller format stores which now account for 44 percent of the brand’s stores.
Lewis said that while the availability of retail space in upmarket shopping malls remained a challenge, it planned to open more stores in the next financial year.
The group said its network outside South Africa increased to 120 stores, with the opening of 10 stores in Namibia, including the first 7 Best Home and Electric stores in the country.
Lewis shares closed 4.62 percent higher at R34 on the JSE on Thursday.