Lewis Group increased merchandise sales by 4.3% to R2.1 billion in the six months to September 2022 as trading conditions weakened significantly in the second quarter of the financial year. Credit sales grew by 16.4% while cash sales declined by 8.1%, reflecting the pressure on consumer disposable income.
The group increased headline earnings by 4.4% to R236 million while headline earnings per share grew by 19.2% to 393 cents, reflecting the positive leverage effect from the group’s aggressive share repurchase programme.
Since the commencement of its earnings enhancing share repurchase programme in 2017, the group has bought back 29.9 million shares and returned over R1 billion to shareholders. In the past six months the group repurchased 3.8 million shares at a cost of R192 million.
The interim dividend was maintained at 195 cents per share.
Chief executive officer Johan Enslin said escalating food, fuel and electricity costs, combined with rising interest rates and record high unemployment levels, impacted consumer spending and confidence in the six months.
“Our traditional retail brands of Lewis, Beares and Best Home & Electric have proven more resilient in the current environment, supported by increased credit sales,” he said. “Cash sales in particular have been impacted by the inflationary pressures facing consumers, with the biggest impact being felt by the group’s cash retail brand UFO.”
Sales in the group’s 131 stores outside South Africa increased by 6.0% and accounted for 18.6% of total sales.
The group’s store footprint increased to 829 following the opening of a net 10 new stores across all brands, including the first Best Home & Electric store in Lesotho. The group will continue to expand its store base despite the difficult trading conditions and remains on track to open a net 16 new stores for the financial year.