Lewis declares dividend in spite of Covid-19 hit
Furniture and appliance retailer Lewis group has pressed ahead with a final dividend repayment, saying it is confident in its prospects despite a hefty hit from Covid-19.
The group said profit almost halved to R182.4m in its year to end-March, from R309.5m previously, with Lewis trimming its final dividend about 49% to 65c.
Covid-19 adjustments reduced profit before taxation by R339m and headline earnings by R224m.
This includes an increase in the debtors impairment provision of R123m as a result of lost collections in March due to store closures during lockdown, and a further increase of R190m in the debtors impairment provision for the potential economic disruption from Covid-19.
CEO Johan Enslin said that while consumers were under pressure Lewis has seen increased post-lockdown sales driven by pent-up demand. The group’s business model proved resilient during the lockdown trading restrictions, he said.
“The strength of our balance sheet and cash position ensured that we did not need to access any bank funding during the lockdown period, despite all our stores being closed for an extended period,” Enslin said.
In morning trade on Tuesday the share price of Lewis had jumped 8.52% to R13.50, putting it on track for its best one-day performance in almost a month.
The group’s share has fallen 60.64% so far in 2020.
Update: August 25 2020
This article has been updated with share price information