LEW Latest News (as of July 2025):• Peregrine Capital Acquisition (July 15, 2025): Peregrine Capital Proprietary Limited clients have acquired a beneficial interest in Lewis Group, now holding 6.19% of the total issued capital. This indicates significant institutional investor confidence.
• GCR Rating Upgrade (July 14, 2025): Global Credit Ratings (GCR) affirmed Lewis Group's national scale issuer ratings at A+(ZA) (long-term) and A1(ZA) (short-term), and upgraded the outlook from Stable to Positive. This reflects a resilient business model, strong credit-based sales growth, robust earnings, and strong liquidity.
• Strong Trading Performance (June 11, 2025): Lewis Group reported a 66.9% increase in operating profit to R1.2 billion for the year ended March 2025, driven by strong credit sales and expanding margins.
• News24 Company of the Year 2025 (March 20, 2025): Lewis Group was named "Company of the Year" in the News24 Business Awards 2025, recognizing its strong shareholder value creation, performance, transformation, and transparency amidst challenging conditions.
Financial Highlights (Year ended March 31, 2025):
• Merchandise Sales: Increased by 9.2% to R5.1 billion.
• Credit Sales: Increased by 12.1%, accounting for 68.0% of total merchandise sales (up from 66.2% in FY2024).
• Total Revenue: Increased by 13.5% to R9.3 billion.
• Operating Profit: Increased by 66.9% to R1.2 billion.
• Operating Profit Margin: Improved significantly from 14.8% to 22.7%.
• Headline Earnings: Increased by 53.5% to R768 million.
• Headline Earnings Per Share (HEPS): Increased by 60.3% to 1,483 cents.
• Earnings Per Share (EPS): Increased by 80.7% to 1,457 cents.
• Total Dividend: Increased by 60.0% to 800 cents per share (final dividend up 66.7% to 500 cents).
• Return on Equity (ROE): Improved from 9.3% to 15.4%, exceeding the medium-term target of 15%.
• Gross Profit Margin: Strengthened by 30 basis points to 43.4%.
• Debtors Book Growth: Grew by 14.5%.
• Satisfactory Paying Customers: Increased to an all-time high of 83.5% (from 81.3%).
• Collection Rate: Ended the year at 78.9%.
• Non-Performing Accounts: Reduced from 5.5% to 4.1% of all credit customers.
• EBITDA: Increased significantly to R1.5 billion (FY2024: R1.1 billion).
• Net Debt to EBITDA (incl. lease liabilities): Remained conservative at 1.2x (FY2024: 1.4x).
• Net Interest Coverage (incl. lease liabilities): Stable at 8.0x.
• Liquidity: Strong, with over R500 million/month in collections and R1.1 billion in unutilised facilities.
Business Model:
• Diversified Retailer: Offers exposure across Southern Africa's retail customer markets.
• Target Segments: Well-established traditional brands in the low to middle-income credit market, and upper-income cash customers through UFO and Real Beds.
• Core Strength: Expertise in credit sales, which accounts for a significant portion of merchandise sales (68%) and contributes to financial services income (35% of total revenue).
• Extensive Store Network: 918 stores as of March 2025 (net 33 new stores opened, plus 16 from Real Beds acquisition). Plans for at least 20 new traditional and 20 specialist bed stores in FY2026.
• Value Proposition: Value positioning in consumer durable products.
• Acquisition Strategy: Acquisition of Real Beds expands reach into the cash retail bed specialist market.
Economic Environment & Outlook:
• Challenging Environment: Acknowledges increasing geopolitical tensions, instability within the Government of National Unity in SA, slowed economic recovery, and dampened growth prospects.
• Consumer Demand for Credit: Expected to remain high.
• Management Expectation: Sustained turnaround in retail spending will take longer than previously anticipated.
• Cost Pressures: Eased due to improved shipping conditions and favorable ZAR/US Dollar exchange rate.
Positives:
• Exceptional financial performance (profit, revenue, EPS, dividends, ROE growth).
• Strong credit management leading to improved debtor book quality (lo