General SENS Submitter Company - Lewis Group Limited - Trading Update and Trading Statement for the year ended 31 March 2018 - LEWI

Lewis Group Limited - Trading Update and Trading Statement for the year ended 31 March 2018 - LEWI

Lewis Group Limited
Registration Number: 2004/009817/06
JSE Bond Code: LEWI
(“Lewis”)

TRADING UPDATE AND TRADING STATEMENT FOR THE YEAR ENDED 31 MARCH 2018

TRADING UPDATE

Lewis Group delivered an improved sales and collections performance for the 12 months ended
31 March 2018 (“the year”), despite the continued challenging economic conditions and adverse
impact of the National Credit Act’s affordability assessment regulations.

The trading results for the newly acquired United Furniture Outlets (“UFO”) chain have been
incorporated for the two months since acquisition.

Merchandise sales for the fourth quarter increased by 21.7% over the corresponding period
(9.0% higher, excluding UFO), resulting in 9.9% growth for the year (7.4% growth excluding
UFO). Comparable stores sales grew by 11.2% for the quarter and 10.1% for the year.

After declining by 3.2% in the first half, revenue increased by 1.8% in the second half to reflect a
year-on-year decline of 0.6%, with the main impact from a 9.8% reduction in Other Revenue. The
reduction in Other Revenue is largely due to declining annuity streams resulting from lower credit
sales in prior years, compounded by the implementation of the prescribed maximum credit life
insurance rates in August 2017 capping credit life premium income.

The group’s gross profit margin at 41.4% is at the upper end of the published target range. The
increase in operating costs, excluding debtor costs, was contained below the rate of inflation.

Debtor costs benefitted from improved collections in the stabilising credit environment and
reduced by 10.1% over the year.

TRADING STATEMENT

As a result of the above factors, shareholders are advised that the group anticipates earnings for
the period to be as follows:

                               12 months ended       12 months ended
                               31 March 2017         31 March 2018
                               Reported              Expected range

Earnings per share             403.5 cps             290.5 cps – 314.7 cps   22% to 28% lower

Headline earnings per share    400.1 cps             288.1 cps – 312.1 cps   22% to 28% lower
The financial information contained in this announcement has not been audited, reviewed or
reported on by the group’s external auditors. The group’s results for the period will be released
on SENS on 23 May 2018.

Cape Town
18 May 2018

Debt Sponsor: Absa Bank Limited (acting through its Corporate and Investment Banking division)

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