LEWIS GROUP LIMITED - Results Announcement (Including Audited Summary Consolidated Financial Statements) For the Year Ended 31 March 2025

Results Announcement (Including Audited Summary Consolidated Financial Statements) For the Year Ended 31 March 2025

Lewis Group Limited
Incorporated in the Republic of South Africa
Registration number: 2004/009817/06
Share code: LEW
ISIN: ZAE000058236
Bond Code: LEWI


SHORT-FORM ANNOUNCEMENT:
RESULTS ANNOUNCEMENT (INCLUDING AUDITED SUMMARY CONSOLIDATED
FINANCIAL STATEMENTS) FOR THE YEAR ENDED 31 MARCH 2025
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 AND
DIVIDEND DECLARATION

1. Introduction

Shareholders are advised that the following have been distributed:

   -   the company's full announcement being the highlights, results commentary (which
       includes the cash dividend declaration referred to below) and the summary
       audited consolidated financial results for the year ended 31 March 2025 ("results
       announcement")
   -   the company's audited consolidated financial statements for the year ended 31
       March 2025 ("audited financial statements"); and
   -   cash dividend declaration of 500 cents per share.

The integrated report for the year ended 31 March 2025 will be released on or before 30
June 2025.

2. Highlights

   •   Merchandise sales increased by 9.2% to R5.1 billion
   •   Revenue increased by 13.5% to R9.3 billion
   •   Gross profit margin improved from 43.1% to 43.4%
   •   Satisfactory paid accounts at 83.5% up from 81.3%
   •   Debtors book grew by 14.5%
   •   Operating profit increased by 66.9% to R1.2 billion
   •   Operating profit margin at 22.7% up from 14.8%
   •   Earnings per share increased by 80.7% to 1 457 cents
   •   Headline earnings per share increased by 60.3% to 1 483 cents
   •   Total dividend increased by 60.0% to 800 cents per share                                                                                          1
   • Return on equity at 15.4% up from 9.3%

3. Results Commentary

Introduction
Lewis Group increased operating profit by 66.9% for the year ended 31 March 2025,
driven by robust growth in credit sales, expanding gross profit, strong other revenue
growth and continued improvement in the quality of the debtors portfolio.

The directors have demonstrated confidence in the Group's cash generating ability and
growth prospects by increasing the final dividend by 66.7% to 500 cents per share,
resulting in a total dividend of 800 cents per share for the year.

Trading and financial performance
Merchandise sales increased by 9.2% to R5.1 billion. After increasing by 8.5% for the
first half of the year, merchandise sales growth accelerated to 9.8% for the second six
months.

Merchandise sales in the traditional retail segment, which accounted for 89.5% of sales,
increased by 8.5%. The speciality segment, comprising predominantly of UFO, Bedzone
and Real Beds, generated merchandise sales of R532.8 million. Comparable store sales
across all brands grew by 5.9%.

Sales in the stores outside South Africa, which represent 15.7% of the store base,
increased by 11.9% and accounted for 18.3% of Group merchandise sales.

The strong credit sales growth trend continued, with credit sales increasing by 12.1% and
cash sales by 3.4%. Credit sales accounted for 68.0% of total merchandise sales (2024:
66.2%). The Group has maintained its prudent credit granting criteria in the constrained
spending environment and the credit application decline rate increased to 38.5% (2024:
35.1%).

Other revenue, consisting of effective interest income and ancillary services income as
well as insurance revenue, benefited from the strong credit sales growth in recent years
and increased by 19.1%.

Total revenue, comprising merchandise sales and other revenue, increased by 13.5% to
R9.3 billion (2024: R8.2 billion).

The gross profit margin strengthened by 30 basis points to 43.4%, supported by 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.

Operating cost growth of 13.0% was contained below revenue growth. Costs were
impacted by performance and growth-related variable costs following the addition of a net
49 stores.



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The quality of the Group's debtors' book continued to improve, with satisfactory paying
customers reaching a record 83.5% (2024: 81.3%) and a solid collection rate of 78.9%
(2024: 79.7%). Non-performing accounts reduced from 5.5% to 4.1% of all credit
customers.
Debtor costs reduced by 2.6%, a notable achievement given the 14.5% increase in the
debtors' book. Debtor costs as a percentage of debtors at gross carrying value improved
to 15.0% from 17.6%. The debtors' impairment provision as a percentage of debtors at
gross carrying value reduced to 37.2% (2024: 37.5%).

Operating profit increased by 66.9% to R1.2 billion and the operating margin improved by
790 basis points from 14.8% to 22.7%.

Net finance costs were R67.1 million higher at R204.6 million mainly due to higher
borrowing costs over the reporting period. The gearing ratio (including lease liabilities)
increased to 36.6% (2024: 31.7%) and the borrowings ratio (gearing ratio, excluding
lease liabilities) increased to 17.3% (2024: 11.7%). The higher borrowings relate mainly
to the increased investment in the debtors' book. Both ratios are well within the Board's
risk appetite levels and management's guided ranges.

Cash flow from operations increased by 34%, reflecting stronger operating performance
and improved cash generation.

Headline earnings increased by 53.5% to R768.2 million. Earnings per share increased
80.7% to 1 457 cents and headline earnings per share by 60.3% to 1 483 cents,
reflecting the positive leverage effect of the Group's share repurchase programme. The
Group repurchased 0.9 million shares at a cost of R43.9 million in the first half of the year
to September 2024 and no further repurchases were undertaken in the second half.

The Group exceeded its medium-term target of a 15% return on equity, delivering 15.4%
through enhanced profitability and a strategically executed share repurchase programme
aimed at maximising shareholder returns.

The Group's balance sheet remains strong, with a net asset value of R5.1 billion.

Expanding store footprint
The Group continued to capitalise on opportunities to acquire well located trading space
to support its store expansion strategy. The store footprint was increased to 918, with the
opening of a net 33 new stores and an additional 16 stores acquired through the
purchase of Real Beds.

Real Beds, a cash retail bed specialist with 12 stores in South Africa and four in
Botswana, has been successfully integrated into the Group's operations.




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During the year, 170 stores across the portfolio were refurbished to ensure that stores
remain modern and appealing to promote merchandise.

Outlook
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.

The challenging environment has slowed the country's economic recovery and
dampened growth prospects, with a sustained turnaround in retail spending now
expected to take longer to materialise than previously anticipated.

Consumer demand for credit is expected to remain high, and the Group aims to drive
sales growth through its proven merchandise and marketing strategies executed by the
experienced executive and operational management team.

Despite the constrained retail environment, the Group will continue to invest for long-term
growth in its debtors' book and store portfolio. Management is targeting to open a
minimum of 20 new traditional retail stores and 20 specialist bed stores in the new
financial year.

Dividend declaration

Notice is hereby given that a final gross cash dividend of 500 cents per share in respect
of the year ended 31 March 2025 has been declared payable to holders of ordinary
shares. The number of shares in issue as of the date of declaration is 52 159 288. The
dividend has been declared out of income reserves and is subject to a dividend
withholding tax of 20%. The gross dividend for determining the dividend withholding tax is
500 cents and the dividend withholding tax payable is 100 cents for shareholders who
are not exempt. The net dividend for shareholders who are not exempt will therefore be
400 cents. The dividend withholding tax rate may be reduced where the shareholder is
tax resident in a foreign jurisdiction which has a Double Tax Convention with South Africa
and meets the requirements for a reduced tax rate. The company's tax reference number
is 9551/419/15/4.


The following dates are applicable to this declaration:

  Last date to trade "cum" dividend                       Tuesday        22 July 2025
  Date trading commences "ex" dividend                    Wednesday      23 July 2025
  Record date                                             Friday         25 July 2025
  Date of payment                                         Monday         28 July 2025

Share certificates may not be dematerialised or rematerialised between Wednesday, 23
July 2025 and Friday, 25 July 2025, both days inclusive.



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For and on behalf of the board




Hilton Saven              Johan Enslin                    Jacques Bestbier
Independent               Chief Executive Officer         Chief Financial Officer
non-executive
chairman

Cape Town
29 May 2025




4. Auditors Report in Audited Financial Statements

Our independent auditors, Ernst & Young Inc, have expressed an unmodified audit
opinion on the audited financial statements and on the results announcement for the year
ended 31 March 2025.

The independent auditors report includes a section on key audit matters. The only key
audit matter is the expected credit losses on trade receivables.

The full independent auditor's report is set out on pages 12 to 15 of the audited financial
statements.

Refer https://www.lewisgroup.co.za/wp-content/uploads/2025/05/Annual-Financial-
Statements-for-the-year-ended-31-March-2025.pdf



5. Short Form Announcement

This short-form announcement is the responsibility of the company's directors and is a
summary of the full audited financial statements for the year ended 31 March 2025 and
does not contain full or complete details.

The results announcement and the audited financial statements can be downloaded from
https://senspdf.jse.co.za/documents/2025/jse/isse/LEW/FY25.pdf
and on the Group's website www.lewisgroup.co.za as follows:



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Results announcement: Refer https://www.lewisgroup.co.za/wp-
content/uploads/2025/05/Audited-Final-Results-for-the-year-ended-31-March-2025.pdf



Audited financial statements: Refer https://www.lewisgroup.co.za/wp-
content/uploads/2025/05/Annual-Financial-Statements-for-the-year-ended-31-March-
2025.pdf

The full results announcement is available for inspection and may be requested at the
company's registered office, at no charge, during normal business hours. Any investment
decision in relation to the company's shares should be based on the full announcement.



Cape Town
29 May 2025

Sponsor
The Standard Bank of South Africa Limited

Debt Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited




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Date: 29-05-2025 07:05:00
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