LEW01 - Trading Statement Lewis Group Limited Incorporated in the Republic of South Africa Registration number: 2004/009817/06 Bond code: LEW01 ISIN: ZAG000110222 (“the group”) TRADING STATEMENT Shareholders are advised that the group is currently finalising its results for the year ended 31 March 2016 (“the period”), which will be released on SENS on Wednesday 25 May 2016. Trading conditions became increasingly challenging in the second half of the period owing to the further slowdown in the economy, higher levels of unemployment in the group’s target market and the introduction of the National Credit Regulator’s affordability assessment guidelines which negatively impacted credit sales. Trading in the fourth quarter was further impacted by aggressive discounting by a major competitor ahead of store closures. After increasing by 8.8% in the first half, merchandise sales declined by 2% for the second half and were 2.9% higher for the period. Revenue for the period increased by 2.2%. The group’s gross profit margin has strengthened over the period while operating costs, excluding the Beares acquisition, continue to be tightly managed. Debtor cost growth at 17.1% was similar to the level reported at the interim results. The group anticipates headline earnings per share for the period to be between 24% and 29% lower than the 845 cents reported for the prior year. Headline earning per share for the period is expected to be between 642 cents and 600 cents. As previously advised to shareholders, the group’s decision to move from term to monthly insurance policies in all three trading brands will significantly reduce the level of capital required by the group’s wholly-owned subsidiary, Monarch Insurance. As part of this process a large portion of the equity and bond portfolio has been liquidated to further de-risk the business in light of a potential sovereign rating downgrade. This has resulted in investment income for the period increasing by R452.6 million over the prior year. This has benefited earnings per share which are expected to increase by between 17% and 22% over the 908 cents reported for the prior year, but does not impact headline earnings. Earnings per share is expected to be between 1062 cents and 1107 cents. The information in this trading statement has not been reviewed and reported on by the group’s independent external auditors. Cape Town 16 May 2016 Debt Sponsor Absa Bank Limited (acting through its Corporate and Investment Bank division) Date: 17/05/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.