Shares in furniture retailer Lewis Group jumped by 9% on Wednesday after it said it expected its interim earnings to rise by as much as 55% in a robust trading statement for the six months ending 30 September.
The group expects headline earnings per share to rise between 45% and 55%, in an expected range of 540 to 577 cents per share, compared to the previous period’s 372 cents.
It also forecast earnings per share to increase between 45% - 55%. in an expected range of 515 to 551 cents per share, compared to the previous period’s 355.
By 12.30pm the firm’s shares were up 9.11% to R74.74 on the JSE. The shares have been trending higher and have risen 80.26% in a year, up 58.56% in three years.
Lewis said the increase reflects strong operational performance across its traditional retail brands—Lewis, Best Home and Electric, and Beares— bolstered by steady credit sales and a growing debtors’ book.
The group's footprint of 869 stores covers major metropolitan and rural areas in South Africa as well as neighbouring African countries.
Additionally, Lewis said it has benefited from improved collections, which the company reports are near record levels, indicating healthier credit conditions among its customer base.
Despite challenges in sea freight markets, Lewis Group said it has maintained stable gross margins, in line with management’s targets. Operating costs have been managed within these targets as well, while growth in insurance service expenses remains proportional to an increase in insurance revenue.
This cautious cost management, combined with growing revenue, has led to improved profitability across its traditional retail brands, it said.
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