Strategy and targets

Lewis Group’s strategy is to “create sustainable growth in shareholder value by offering exclusive merchandise on credit to the lower to middle income market through a network of stores in South Africa and neighbouring countries”.

The strategy is reviewed annually by the Board and executive management, together with progress against the medium-term strategic objectives.

Material issues and risks that could impact on the group’s strategy, its stakeholders and its ability to sustain growth are reviewed on a continuous basis as part of the strategic planning process.

Action plans are developed to achieve the strategic objectives and also to manage the material impacts on the group.

In reviewing the material impacts for the year ahead, the impact of changes to the regulatory environment was identified as a matter which could have an impact on the business in the short- to medium-term. These include the capping of customer protection insurance, the affordability assessment regulations and insurance regulations.
 

 

Performance and targets

Material impact   Performance indicators   Achieved   Targets  
        2017 2017  2016 Medium-
term
Merchandising and supply chain   Gross profit margin (%)   41.6 39-41 38-42 41-43
Credit management   Debtor costs as a percentage of net debtors   19.1 16-18 17-20 14-16
    Satisfactory paid customers (%)   68.5 66-70 66-70 70-72
Execution of business model   Operating profit margin (%)   10.1 12-15 5-10 12-15
    Credit sales as a percentage of total sales   65.2 63-66 63-66 63-66
    Increase in operating costs (excluding debtor costs)   5.5 8 2-4 3-5
Capital management   Gearing (%)   2.9 25-30 zero <25
Human capital management   Skills development: staff trained annually   11 652 >3 000 >3 000 >3 500