Revenue rand for the year ended 31 March 2014 was up 1.8 per cent to 5.2 billion from 5.1 billion rand in the previous comparative year. The group’s gross profit margin also grew 36.7 per cent from 38.3 per cent.
“Management has continued to focus on tight cost disciplines in the current slower sales environment,” the group said in a statement.
“Growth in operating costs, excluding debtor costs, was well contained to 1.6 per cent, despite inflationary cost pressures from a weakening rand and other sources.”
[DATA LEW:Lewis Group Limited] is a South African household furniture, electrical appliances and home electronics retailer that sells its products on credit. The group also includes a financial services arm that provides short-term insurance.
(READ MORE: Lewis delivers steady growth in difficult environment)
Group merchandise sales declined by 2.5 per cent to 2.4 billion rand as trading became more difficult in the second half of the year, with sales for the third quarter declining by 6.3 per cent and by 3.3 per cent in the fourth quarter. Operating profit also declined to 1.1 billion rand from 1.2 billion rand in 2013.
Operating costs, excluding debtor costs, grew by 1.6 per cent to 2.6 billion rand for the period under review from 2.4 billion rand in the previous year. According to the group, the growth was nonetheless well contained despite inflationary cost pressures from a weakening rand and other sources.
Headline earnings per share declined 8.6 per cent to 921 cents from 1,008 cents in 2013, and the total dividend was maintained at 517 cents.
“The performance of the debtors' book reflects the deteriorating credit climate and the increasingly challenging credit collection environment,” the group explained.
“The credit application decline rate increased from 36.5 per cent to 38.4 per cent. Credit sales accounted for 72.3 per cent of total sales compared to 75.3 per cent in 2013.”
Despite the current economic slowdown, the group managed to open 17 new stores, bringing the store total to 636 stores.
Revenue for the Lewis segment increased to 4.4 billion rand for the period under review, and the Best Home and Electric segment’s revenue also grew to 755.6 million rand. Revenue for the My Home segment increased to 126.1 million rand. Total segment revenue was recorded at 5.2 billion rand for the period under review.
“The current difficult trading conditions are expected to continue into the new financial year,” the group explained.
“The focus in this challenging environment will remain on driving credit sales growth, containing costs and improving collections through higher levels of productivity by building on the pro-active approach to collections at store level.”