South African listed furniture retailer JD Group on Tuesday reported a 38% rise in headline earnings per share to 376,2 cents for the six months ended March 31, from 272,5 cents a year ago.
The distribution per share was up by 106% to 185 cents, from 90 cents a year ago.
The group reported a 9% rise in revenue to R5,2-billion, while headline earnings grew by 42% to R641-million.
Merchandise sales were 11% higher at R3,6-billion from R3,2-billion the previous year, and like-for-like sales growth was 11%.
JD Group includes the retail brands Joshua Doore, Bradlows, Morkels, Hi-Fi Corporation, Price ‘n Pride, Electric Express, and Barnetts, as well as Abra in Poland.
At the same time, operating income was 37% higher at R936-million, and the operating margin improved to 18,1% from 14,4% a year earlier.
Thanks to strong cash flows, JD Group was able to eliminate its gearing completely, from 17% in 2004. Cash generated from trading activities rose to R989-million, from R745-million a year earlier.
Due to the strength of the rand and falling dollar prices, the rand retail prices of the company’s electrical goods fell by 12% on average during the year. At Hi-Fi Corporation, which sells most of these goods, the product margin fell by 1,6%, while across the company as a whole, product price deflation caused the group to take stock markdowns totalling R16-million.
Bad debts written off decreased from 3,3% to 2,9% of gross receivables, and arrears represented only 10,1% of gross receivables, down from 14,9% a year earlier. The rand amount of arrears also fell — to R710-million, from R1,03-billion year-on-year, and the average length of the company’s debtors’ book fell to 13,5 months.
Inventories, meanwhile, rose by 15% on the previous year due to the replenishment of stock after the very buoyant festive season.
Looking ahead, the company said trading has remained buoyant subsequent to the reporting date. Should these trends continue for the remainder of the financial year, it expects to have the same earnings distribution ratio as in the 2004 financial year. Dividend cover will remain at two times.
Cash generation is traditionally also stronger in the second half of the financial year, JD Group noted. Given the current sound financial health of the consumer, the quality of its instalment sale receivables should be maintained. — I-Net Bridge