Lewis investors approve of earnings and sales growth
Share records strongest one-day rise since start of November after release of interim results as increase in impairments sees net asset value decline 9.4%
Tougher new accounting rules saw furniture retailer Lewis, which targets mainly lower-income consumer through its Lewis, Beares and Best Home and Electric shops, increase its provisions for bad debt write-offs by 50%. Management, which has had a number of run-ins with the National Credit Regulator (NCR) and activists, told shareholders on Wednesday that the new accounting standard IFRS 9 required the group to increase its provision for impairments by 50%, taking them up to R2.4bn from R1.6bn. Under the old accounting rules, Lewis had provided for the impairment of 29.6% of its outstanding loans. The new rules require Lewis to provide for the impairment of 43.9% of the outstanding loans on its books at end-September. Earlier in 2018, the high court dismissed an appeal by the NCR against a ruling that had cleared Lewis of breaching credit rules with fees it charges its customers. The R803m additional impairment is in line with allegations made by credit lobby group Summit Financial Pa...
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