Rival furniture groups both report strong sales growth
Competing furniture and appliance groups Ellerines and Lewis posted their results yesterday. Both groups reported strong sales growth, with Lewis appearing to be doing a better job of extending credit.
Lewis reported a 16percent increase in sales to R3,3billion. Wider profit margins resulted in its attributable profit growing 18percent to R599million for the year ended March. A final dividend of R1,50 was declared.
Ellerines's total revenue for the six months ended February rose 10percent to R4,4billion. Ellerines is more than twice Lewis's size, with higher sales in six months than Lewis's full year results.
Both credit retailers reported widening profit margins. Lewis said that its merchandise gross margin this year was 34percent, compared with 35percent last year. Ellerines's gross profit margins widened to 45,2percent from the previous year's 44,2percent.
Ellerines shareholders will receive an interim distribution of 169,6c a share.
In contrast to Ellerines and other credit retailers, Lewis reported less bad debts despite higher interest rates.