Lewis Group (LEW) H2 2024 earnings summary

Executive summary

• Revenue rose 9.8% to R8.184bn and operating profit increased 13.1% to R689.5m; EPS rose 15.9% to 806 cents.

• Debtors book grew 15.6%; satisfactory-paying accounts reached a record 81.3%, while elevated expected-credit-loss provisions reflected economic uncertainty.

Financial highlights

• Merchandise sales increased 4.7% to R4.653bn; other revenue grew 17.2%.

• Gross margin rose to 43.1% from 40.6%; operating margin increased to 14.8% from 13.7%.

• Net profit rose 6.2% to R436.4m; headline earnings fell 1.9%, while HEPS increased 7.1% to 925 cents.

• Total operating costs, including insurance service expenses, increased 5.0% to R3.558bn; net finance costs rose to R136.7m from R76.2m.

Outlook and guidance

• FY2025 plans include 20 new stores, continued debtor-book investment and market-share growth, and ongoing share repurchases.

• Medium-term targets: gross margin 41–43%, operating margin 16–20%, debtor costs 12–15% of gross debtors, and operating-cost growth 4–8%.

• Trading conditions and consumer spending are expected to remain weak; port constraints, shipping delays and freight-rate pressure are expected to persist.