June 11, 2025
Cape Town – Lewis Group reported a 66.9% increase in operating profit to R1.2 billion for the year to March 2025, driven by strong credit sales, expanding margins and robust growth in the debtors’ portfolio, while satisfactory paying customers reached a new record high. The group’s operating margin improved significantly, increasing by 790 basis points from 14.8% to 22.7%.
The furniture retail group increased headline earnings by 53.5% to R768 million and headline earnings per share by 60.3% to 1 483 cents, supported by the positive leverage from the share repurchase programme.
The final dividend was increased by 66.7% to 500 cents per share, bringing the total dividend for the year to 800 cents per share, as the directors showed their confidence in the group’s cash generating ability and growth prospects.
Cash flow from operations increased by 34%.
The group exceeded its medium-term return on equity target of 15%, improving the return from 9.3% to 15.4% through higher profitability and the strategically executed share repurchase programme aimed at maximising shareholder returns.
CEO Johan Enslin said the group increased its store footprint to 918 with the opening of a net 33 new stores and an additional 16 stores which were acquired through the purchase of cash retail bed specialist, Real Beds.
Merchandise sales gained momentum in the second half of the financial year and increased by 9.2% to R5.1 billion. Credit sales increased by 12.1% as the strong growth trend continued, with credit sales accounting for 68.0% of total merchandise sales compared to 66.2% last year.
Total revenue, comprising merchandise sales and other revenue, increased by 13.5% to R9.3 billion.
Enslin said the gross profit margin strengthened by 30 basis points to 43.4% due to lower negotiated shipping rates on imported merchandise in the second half of the year as well as the favourable movement in the Rand/US dollar exchange rate.
The debtors’ book grew by 14.5% and quality of the portfolio continued to improve. Satisfactory paying customers increased to an all-time high 83.5% from 81.3% in the previous year and the collection rate ended the year at 78.9%. Non-performing accounts reduced from 5.5% to 4.1% of all credit customers.
On the outlook for the year ahead, Enslin said increasing geopolitical tensions have created uncertainty across international markets and increased business risks locally. This uncertainty has been compounded by the recent instability within the Government of National Unity, he said.
“The challenging environment has slowed the country’s economic recovery and dampened growth prospects. We expect a sustained turnaround in retail spending will now take longer to materialise than previously anticipated.” “Consumer demand for credit is expected to remain high, and we aim to drive sales growth through our proven merchandise and marketing strategies executed by the experienced executive and operational management teams,” said Enslin. The group will continue to capitalise on opportunities to acquire well located trading space to support its store expansion strategy, with a minimum of 20 new traditional retail stores and 20 specialist bed stores planned to open in the 2026 financial year.
Ends
Issued by Tier 1 Investor Relations on behalf of Lewis Group
Enquiries Graeme Lillie Tier 1 Investor Relations 082 468 1507
