Lewis Group say restricted credit access hurts profit. Photo: Simphiwe Mbokazi/ANA

JOHANNESBURG - JSE-listed retail company Lewis Group has blamed the National Credit Act’s affordability assessment regulations, saying they restricted access to credit in the country and limited the group’s credit sales. 

The retailer said the performance for the six months ended September 30, “reflects the challenging economic and consumer environment in which the business is trading and the impact of these conditions on the group’s lower to middle income target customers”. It said trading conditions had been “compounded” by the ongoing impact of the regulations.

“Merchandise sales reflected a steady improvement over the period increasing by 5percent on last year, with comparable stores sales up 7.3percent. Revenue declined by 3.2percent mainly as a result of the 9.8percent decline in other revenue over the corresponding prior period,” the company said on Friday. 

Lewis Group’s gross profit margin strengthened by 40 basis points to 40.9percent and “is in line with management expectation”. It added: “Debtor costs benefited from improved collections and reduced by 11.5percent. “This reflects an improvement from the 6percent increase reported at the 2017 year end.”