South African furniture retailer JD Group said on Monday profit attributable to shareholders fell to R138-million in the six months to end-February due to tighter consumer spending.
The group said its diluted headline earnings dropped 45% to 221 cents per share in the same period.
”These results for the six months ended February confirm the severity of the indebtedness of the South African consumer,” the company said in a statement.
It added that higher interest rates and a jump in fuel prices had significantly curbed consumer spending.
JD Group has split its business into four distinct operating units.
The traditional retail unit, which consists of seven retail chains, reported a 13% reduction in turnover in the six months to February due to a decrease in the number of credit applications.
The cash retail unit, which includes Incredible Connection, increased its turnover by 6% though operating profit fell 14% to R131-million, the group said.
The international unit, consisting of the Abra business in Poland, achieved top line growth of 44%.
”Abra is poised to grow its business aggressively throughout Poland and into neighbouring countries,” the group said.
JD Group has also finalised the separation of the financial services unit from its traditional retail unit.
”The current economic conditions are not conducive to an improvement in consumer spending and therefore we expect top line sales to remain under pressure,” it said. – Reuters