Furniture company Lewis said on Wednesday the turnaround in the performance of its traditional retail brands continued in the year to March, with strong merchandise sales growth and the early benefits of its diversification strategy driving headline earnings per share 24.3% higher to 376 cents.
It said its total dividend was up 17% to 234 cents per share.
Merchandise sales were boosted by the acquisition of United Furniture Outlets (UFO) and increased by 22.9% to R3.5 billion. Comparable store sales were up 6.9%.
The group’s strategy of diversifying across market segments and retail channels was starting to pay dividends, CEO Johan Enslin said.
“UFO is proving to be a sound acquisition, with new stores trading well. UFO contributed sales of R478 million in its first full 12 months in the group and has enabled the business to access higher-income customers,” he said.
Lewis said start-up omnichannel home shopping retailer INspire was gaining traction, generating R27.2 million sales in its first 10 months since launch.
The group’s store base increased to 784 as 30 stores were opened and 19 closed. UFO opened eight stores and closed three, bringing its store footprint to 36. Five to ten new UFO stores were planned for the 2020 financial year, the company said.
Lewis has 120 stores outside South Africa following the opening of 10 new stores in Namibia.
Enslin said the strong sales growth experienced in the second half was expected to continue into the new financial year, with UFO complementing the performance of the traditional retail brands.
The group’s diversification strategy was expected to continue supporting sales growth.
“UFO has extensive expansion opportunities and INspire is anticipated to reach break-even point in the forthcoming financial year,” he said.
– African News Agency