Strong credit sales lift Lewis Group’s earnings

Furniture and home appliance retailer Lewis group expects its full-year earnings to soar as much as 65% as it benefits from higher credit sales, expanding margins and “robust” growth in the debtors’ book.

The group, which is valued at R3.6bn on the JSE, said on Monday that its headline earnings per share (HEPS) for the year to end-March are expected to rise 55%-65% to between 1,433c and 1,525c. Earnings per share (EPS) are expected to increase by as much as 85% year on year.

The group’s footprint of 869 stores covers major metropolitan and rural areas in SA and neighbouring African countries. Its brands include Beares and UFO Furniture.

The group turned in a strong trading and operational performance supported by growth in other revenue, which continues to benefit from sustained credit sales growth in recent years, as well as an expansion in the gross profit margin in the second half.

The growth in operating costs was contained to less than the growth in revenue.

Debtor costs have reduced slightly despite the significant growth in the group’s debtors’ book. The quality of the debtors’ portfolio continued to improve, with solid collection rates and the proportion of satisfactory paid accounts maintained at record levels, it said.

“These factors have contributed to substantial growth in profitability, with headline earnings for the period expected to be between 48% and 58% higher than the R500.4m reported for the 2024 financial year,” it said.

Lewis’ share price was up 2.97% at R68.99 by 10.55am on the JSE, though year to date the shares have fallen 13%.

The group will publish its results on May 29.

mackenziej@arena.africa