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.

 

 

Performance and targets

Material impact Performance indicators Achieved Targets
2016 2016  2017 Medium-
term
Merchandising and supply chain Gross profit margin (%) 38 37-38.5 39-41 41-43
Credit management Debtor costs as a percentage of net debtors 17.1 12-14 16-18 14-16
Satisfactory paid customers (%) 68.8 66-70 66-70 70-72
Execution of business model Operating profit margin (%) 41.1 19-21 12-15 15-18
New store openings 44 25-30 10-15 10-15
Credit sales as a percentage of total sales 64.3 68-70 63-66 63-66
Operating costs as a percentage of revenue (excluding debtor costs) 40.0 36.5-37.5 40-42 37-39
Capital management Gearing (%) 25.5 30-34 25-30 <35
Human capital management Skills development: staff trained annually 12 512 >3 000 >5 000 >3 500
Regulatory environment The board is responsible to oversee legislative, regulatory and governance compliance, and has a zero tolerance approach to any regulatory breaches or non-compliance
Information technology The IT Steering Committee reports to the Risk Committee and manages IT performance on projects and IT controls

 

Strategic objectives, key risks and action plans