The Lewis share price reacted positively to news that the group was purchasing cash furniture retailer United Furniture Outlets, with the stock gaining 1.94% to close at R27.32. United Furniture Outlets is an upmarket, privately owned retailer with a footprint of just 30 stores. The hefty R320m price tag will be paid in cash from the group’s cash resources. United Furniture Outlets’s audited net assets at the end of February were R66.4m and attributable profit for the year to end-February was R21.9m. The end-August unaudited balance sheet reflects net assets of R82m. However, although the Lewis board is satisfied with the unaudited information, it advises shareholders to exercise caution in relying on it. The acquisition does not require shareholder approval. The R320m represents a historic price:earnings rating of almost 15 times and a substantial premium on net asset value, whether the February or August figure is used. The Lewis board said the acquisition would enable the group t...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.