Struggling furniture and household goods retailer Lewis Group will take advantage of poor sentiment for its stockby embarking on a share buyback exercise. Speaking after the release of results for the year to March on Wednesday, CEO Johan Enslin said the company was only lightly geared and that Lewis’ shares were trading at a substantial discount to net asset value (NAV). Lewis, which struggled to maintain operating margins in the past financial year, has slashed its gearing from 25.5% to just 2.9%. An investor presentation document shows Lewis aims to have no gearing in the financial year ahead although the medium-term target still pencils in gearing of less than 25%. The company’s NAV was reflected at R61.33 per share, meaning the share price is offering a 45% discount. Mark Hodgson, an analyst at Avior Capital Markets, said retail stocks traditionally traded at substantial premiums to NAV, but added that Lewis was not a typical retailer with its strong financial services offering...
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