Trading update for the third quarter and nine months ended December 2018
Lewis Group Limited
Incorporated in the Republic of South Africa
Registration number: 2004/009817/06
JSE share code: LEW
TRADING UPDATE FOR THE THIRD QUARTER AND NINE MONTHS ENDED
Lewis Group continued to benefit from its diversification strategy and delivered a strong
sales performance in the third quarter ended 31 December 2018, despite the continued
challenging trading and economic conditions.
Merchandise sales were enhanced by the acquisition of United Furniture Outlets (UFO)
and increased by 22.8% for the quarter, resulting in a 24.6% growth for the nine
months ended 31 December 2018. Comparable stores grew sales by 6.0% for the
quarter and 7.1% for the nine months.
Other revenue, consisting of finance charges and initiation fees, insurance premiums
and services rendered, increased by 0.8% for the quarter (decline of 3.4% after
adjustment for credit impaired accounts). This reflects an improving performance on
the 2.8% decline in other revenue reported for the six months ended September 2018.
For the nine months ended 31 December 2018, other revenue declined by 1.6% (5.5%
after adjustment for credit impaired accounts). This is largely due to lower credit sales
in prior years and the adverse impact of regulatory capping of credit insurance, which
has constrained annuity income streams.
Total group revenue, comprising merchandise sales and other revenue, increased by
13.2% for the quarter and 12.0% for the nine months (11.4% and 10.1% respectively
after adjustment for credit impaired accounts).
In the third quarter, higher credit sales resulted in an increase in debtor costs of 2.7%
(improvement of 5.7% after the adjustment for credit impaired accounts). Debtor costs
for the nine months reduced by 10.3% (20.4% after the adjustment for credit impaired
accounts). This was driven by a strong collection performance throughout the
reporting period, resulting in improved collection rates.
The financial information in this trading update has not been reviewed or reported on
by the group’s independent auditor.
30 January 2019
UBS South Africa (Pty) Ltd
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